Breaking the ‘vicious circle between banks and sovereigns’: Neofunctionalism and liberal Intergovernmentalism as explanations for the establishment of the Single Supervisory Mechanism (SSM)

Adelaar, Elroy (2013) Breaking the ‘vicious circle between banks and sovereigns’: Neofunctionalism and liberal Intergovernmentalism as explanations for the establishment of the Single Supervisory Mechanism (SSM).

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Abstract:This thesis tries to explain the integration of micro-supervision of European banks. In the proposal for the Single Supervisory Mechanism (SSM), the ECB will get authority and certain tasks to perform in the supervision of individual credit institutions. The SSM is one component of a Banking Union, which contains the SSM, a resolution framework, and a single rulebook. As this thesis will show, the SSM can’t be explained without including the resolution framework in the analysis. I’ll test two well known integration theories: neofunctionalism and liberal intergovernmentalism. Noefunctionalism looks to functional spillovers, and pressures from EU institutions and other international actors, that create a demand on member states for establishing the SSM, which is then also more or less automatically delivered by member states. Liberal intergovernmentalism assumes that the SSM is the result of the interests of domestic actors, which are aggregated to the state level, where member states act upon in interstate negotiations. The conclusion of this thesis is that, although a functional spillover from the single currency is an important explanatory factor, liberal intergovernmentalism appears to be best suited for explaining the SSM. However, although the short-term demand for a complete Banking Union is not ‘delivered’ by the member states, there are possible explanations for this that would correspond with neofunctionalist assumptions and which cannot be adopted or rejected with much certainty.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics
Programme:European Studies MSc (69303)
Link to this item:http://purl.utwente.nl/essays/63585
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