Banking Union: an ‘accidental’ institutional revolution?

While the institutional evolution of the EU in response to the crisis so far had been characterised by path-dependent incremental change, the envisaged next steps towards a banking union seem to imply a new quality of institutional change. This paper examines the factors that mark the “tipping point” when the forces of inertia and institutional stability were undermined to such an extent that a new path of institutional development became possible.The institutional dynamics underlying the move towards banking union thus point to the single supervisory mechanism as an almost accidental by-product of a policy response to market pressures.