CEU Electronic Theses and Dissertations, 2014
| Author | Hernandez Sanchez, Alfredo |
|---|---|
| Title | FINANCIAL INTEGRATION IN THE EUROZONE: THE CASE OF THE BANKING UNION |
| Summary | The 2008 financial crisis exposed some of the weaknesses in the European financial system and in the Eurozone. The main objective of this thesis is to tease out the causes that led Eurozone members to agree to yield supervisory prerogatives to the European Central Bank and to agree to a Common Resolution Mechanism and Fund. The Banking Union was possible due to satisfactory demand and supply side conditions. On the supply side, the existence of the institutional framework of the EU enabled the emergence of an arrangement. On the demand the pursuit of a more stable currency union set the incentives for increased financial integration by reducing two sources fragmentation: political risk and moral hazard. The crisis created the public demand for reform and shaped it on two principles a) increased accountability and transparence and b) fiscal neutrality. The governments of Member States faced a delicate tradeoff between the (often conflicting) demands of their constituencies, the market conditions, and their own preferences for maintaining regulatory autonomy. It is argued that rather than a complete remedy to the political fragmentation that caused the fragmentation of the EU sovereign bond markets, the Banking Union is a crisis management tool, a tool that was designed upon the notion that increasing economic integration in the European Union is the correct strategy. |
| Supervisor | Csaba, László |
| Department | International Relations MA |
| Full text | https://www.etd.ceu.edu/2014/sanchez_alfredo.pdf |
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