International Aspects on the European Banking Union (EBU): Dynamism on the Harmonization of the Banking Supervision

   This study aims to analyze the EBU’s direction, objectives and dynamism through three viewpoints as follows. Firstly, we describe the contents of Single Supervisory Mechanism (SSM) and Single Resolution Mechanism (SRM) through institutional analysis. The SSM was established in November 2014, on the other hand, the SRM was set up in January 2015 and it has started as a full-fledged system in January 2016 with the situation that Single Resolution Board (SRB) is playing a key role with Single Resolution Fund (SRF). We consider the introduction of a new tool as a bail-in approach and its coordination with conventional tools such as bail-outs.

   Secondly, we elucidate the feasibility of European Deposit Insurance Scheme (EDIS). The Commission published the proposal and related documents in 2015. Since the aftermath of the global financial crisis, the eurozone countries need to set up an effective common deposit guarantee system for consumer protection through a gradual approach. However, they face problems to harmonize with Germany and to set up a common institution of deposit guarantee. These points need strenuous efforts.

   And thirdly, the study analyzes the EBU’s relationship with Financial Stability Board (FSB) and Federal Deposit Insurance Corporation (FDIC). In terms of international aspects on the EBU, we need to focus on a common recognition with the FSB’s Key Attributes. On the other hand, the FDIC has implemented a plenty of resolutions so far. Therefore, the FDIC is a vital institution for Europe to compare with its functions in actual banking resolution and deposit protection.