Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87222
Authors: 
Schoenmaker, Dirk
Siegmann, Arjen
Year of Publication: 
2013
Series/Report no.: 
Tinbergen Institute Discussion Paper 13-026/IV/DSF51
Abstract: 
An anticipated benefit of the prospective European Banking Union is stronger supervision of European banks. Another benefit would be enhanced resolution of banks in distress. While national governments confine themselves to the domestic effects of a banking failure, a European Resolution Authority would follow a supranational approach, under which domestic and cross-border effects within Europe are incorporated. Using a model of recapitalising banks, this paper develops indicators to measure the efficiency improvement of resolution. Next, these efficiency indicators are applied to the hypothetical resolution of the top 25 European banks, which count for the vast majority of cross-border banking in Europe. Our cost-benefit analysis indicates that the UK, Spain, Sweden, and the Netherlands are the main beneficiaries and thus have the largest economic incentives to join Europe’s Banking Union.
Subjects: 
Financial Stability
Financial Crises
Public Good
International Banking
JEL: 
F33
G01
G28
H41
Document Type: 
Working Paper

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