By Barbera Reisenhofer and Daniela Jaros
While the Eurozone crisis started as banking crisis which turned into a sovereign debt crisis simultaneously leading to the crisis of the monetary union, the first measures taken (bilateral loans to Greece, the EFSF, the ESM, the ECB’s SMP and later OMTs, the Six-Pack and the TSCG) were primarily meant to stabilize and contain the ongoing crisis. The Banking Union, however, completed through the recent agreement on the Single Resolution Mechanism (SRM), is a further, forward-looking step. More than to contain, it is meant to prevent crises of the kind just experienced. It has rightly been described as the most ambitious integration project since the creation of the single currency as it leads to its members transferring the control of their biggest banks to the supranational level.
The Banking Union consists of two pillars – the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM). Continue reading