Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250047 
Year of Publication: 
2022
Series/Report no.: 
SAFE Working Paper No. 340
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
We investigate whether the bank crisis management framework of the European banking union can effectively bar the detrimental influence of national interests in cross-border bank failures. We find that both the internal governance structure and decision making procedure of the Single Resolution Board (SRB) and the interplay between the SRB and national resolution authorities in the implementation of supranationally devised resolution schemes provide inroads that allow opposing national interests to obstruct supranational resolution. We also show that the Single Resolution Fund (SRG), even after the ratification of the reform of the European Stability Mechanism (ESM) and the introduction of the SRF backstop facility, is inapt to overcome these frictions. We propose a full supranationalization of resolution decision making. This would allow European authorities in charge of bank crisis management to operate autonomously and achieve socially optimal outcomes beyond national borders.
Subjects: 
SRB
SRF
bank resolution
banking union
bail-in
ESM
national interest
political economy
bureaucrats' incentives
JEL: 
G01
G18
G21
G28
K22
K23
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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