Italian solution of failing banks and its importance for banking union completion

The banking union creates the system for banking supervision and banking crises based on single European Union rules. The Bank Recovery and Resolution Directive (BRRD) means an important milestone, the main goal of which is to limit government assistance to failing banks (bailout) and replace it with a bail-in system. The article focuses on banking crises and points out that despite the existence of banking union rules, there is legal possibility to circumvent and save banks via the public finances (bailout). On the one hand Italian solution confirms that there are strong weaknesses in the current rules of the banking union, on the other hand it can be interpreted as a flexible framework that can be tailored to a specific country. The article explains the reasons for the distinct of the banking crisis in the banking sector and evaluates the impact of this on the further banking union completion.