TOWARDS A EUROPEAN BANKING UNION: RISKS AND CHALLENGES

Economic instability and financial turbulences in the European Union and especially in the Eurozone over the past years have given rise to calls for a real solution in order to solve the problems of the current crisis. In an integrated monetary area, economic and financial stability are issues relating to collective responsibility. That is why, when trying to deal with the latest challenges, the European Commission has proposed to establish a more unified banking supervision mechanism in the form of a banking union, which will fall under the auspices of the European Central Bank. Although the current banking union proposal seems to be a critical step towards solving the on-going crisis, there are many risks and challenges that the European Union has to deal with. This study aims at bringing together different views in order to highlight strengths and weaknesses of the future banking union. The body of this paper hosts a detailed description of the proposed European banking union, offering valuable insights, recommendations and some proposals for a way forward.