Banking Crisis Management in the EU: An Early Assessment

By J. Pisani-Ferry, André Sapir. 2010

120 citations recorded by the source corpus.

"For well over a decade many observers had warned that the European Union was ill-prepared in case of a financial storm because its market integration far outpaced its policy integration. This situation was well known to policy-makers but it was hoped that financial crises would wait until policy integration occurred. The reality turned out differently, however. We assess the management of the 2007--2009 banking crisis within the EU against this backdrop. In a nutshell, we find that Europe has done better than could have been expected on the basis of existing arrangements. The two federal institutions acted swiftly, the European Central Bank by providing ample liquidity and the European Commission by enforcing competition discipline flexibly. However, there was no institutional innovation in the form of an EU-financed bail-out of transnational financial institutions or a genuine EU financial stress test. Supervisory responsibilities remained entirely with individual countries and coordination problems were managed through a combination of ad-hoc, discretionary cooperation and reliance on EU rules and procedures. It is not possible, however, to determine whether this relatively satisfactory situation is due to the fact that ad-hoc coordination was fundamentally sufficient or because no complex case of cross-border bank failure occurred." Copyright (c) CEPR, CES, MSH, 2010.

Subfields: Finance

View Paper: https://www.semanticscholar.org/paper/673d9433b3d4139c67899fb43e198464eb5bb713

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Finance

Citations in the corpus

Financial Globalisation and the Crisis (2012, unknown): “Second, cases such as Dexia show the difficulties involved in sharing the fiscal costs involved in the resolution of multi-country banking groups (see Pisani-Ferry and Sapir 2010).”
Cross-Border Banking in Europe: Implications for Financial Stability and Macroeconomic Policies (2011, background): “The rescue of multi-country banks such as Dexia and Fortis required the governments involved to devise ad hoc, ex post burden-sharing agreements (see Pisani-Ferry and Sapir, 2010, amongst others).”