Bank supervision without bailout capacity does not constitute a banking union

Evidence

54. As of December 13, 2012, the EU has taken the first steps toward the creation of a banking union that recognizes the severity of these problems. The proposal allows the ECB to act as the common bank supervisor with authority over the Euro Area’s largest banks—those with assets of over 20 percent of GDP or 30 billion euros. Although significant, as indicated in the previous note (53), supervision and monitoring when you don’t have the cash to credibly bail are at best a step toward a banking union. They are not an institutional fix in and of themselves. — Mark Blyth, Austerity, 792

Categorization

• XREF: Connects to the broader EU integration literature and to Blyth’s overall argument that austerity without fiscal capacity fails; relates to Mattei’s account of EU governance limits.