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The Financial Crisis pp 89–113Cite as

Toward Banking Union in Europe: An Interim Assessment

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Abstract

This chapter reviews the main elements of the progress toward a banking union in Europe and addresses some of the challenges on the way forward. It discusses the changing banking landscape and the current fragmentation of European markets. This chapter also reviews the main elements of the anticipated European banking union and analyzes some of the challenges on the way toward an eventual full-fledged banking union.

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Notes

  1. 1.

    The sequence of financial events that started in the summer of 2007 is a series of crises, from the subprime crisis to the banking and economic to the fiscal or the European debt crisis. As none of these terms is fully satisfactory or has been universally adopted, the paper simply refers to “the crisis.”

  2. 2.

    The European Economic Area was established on 1 January 1994 following an agreement between the member states of the European Free Trade Association (EFTA) and the EU. Specifically, it allows Iceland, Liechtenstein, and Norway to participate in the EU internal market without a conventional EU membership. In exchange, they are obliged to adopt all EU legislation related to the single market, except laws on agriculture and fisheries.

  3. 3.

    The threshold can be decomposed into Common Equity Tier 1 ratio of 4.5 %, and in addition, the 2.5 % capital conservation buffer. An add-on of 1 % will be requested to take into account the systemic relevance of the banks considered significant under the SSM Regulation.

  4. 4.

    Financial Times, European bank bail-in will cost +87 basis points, 25 October 2010.

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Authors and Affiliations

  1. Financial Market Authority of Liechtenstein, Landstrasse 109, Postfach 279, 9490, Vaduz, Liechtenstein

    Christian Schmidt

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  1. Christian Schmidt
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Correspondence to Christian Schmidt .

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Editors and Affiliations

  1. Heilbronn University and the University of Tuebingen, Heilbronn and Tuebingen, Germany

    Ted Azarmi

  2. SBUM/EMBA, HEC Paris School of Management in Qatar, Doha, Qatar

    Wolfgang Amann

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Schmidt, C. (2016). Toward Banking Union in Europe: An Interim Assessment. In: Azarmi, T., Amann, W. (eds) The Financial Crisis. Springer, Cham. https://doi.org/10.1007/978-3-319-20588-5_4

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