Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/156214
Authors: 
Belke, Ansgar
Dobrzańska, Anna
Gros, Daniel
Smaga, Pawel
Year of Publication: 
2016
Series/Report no.: 
ROME Discussion Paper Series 16-02
Abstract: 
We analyze the benefits and costs of a non-euro country opting-in to the banking union. The decision to opt-in depends on the comparison between the assessment of the banking union attractiveness and the robustness of a national safety net. The benefits of opting-in are still only potential and uncertain, while costs are more tangible. Due to treaty constraints, non-euro countries participating in the banking union will not be on equal footing with euro area members. Analysis presented in the paper points out that reducing the weaknesses of the banking union and thus providing incentives for opting-in is not probable in the short term, mainly due to political constraints. Until a fully-fledged banking union with well-capitalized backstops is established it may be optimal for a non-euro country to join the banking union upon the euro adoption. Assessing first experiences with the functioning of the banking union and opt-in countries will be crucial for non-euro countries when deciding whether to opt-in.
Subjects: 
banking union
resolution
supervision
deposit guarantee scheme
euro
the ECB
JEL: 
F36
F42
G21
G28
Document Type: 
Working Paper

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