University of Twente Student Theses


The changing role of the ECB and the EBA in the banking union

Werksma, Anouk (2013) The changing role of the ECB and the EBA in the banking union.

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Abstract:The European answer to the sovereign debt crisis is the banking union. In the banking union, and especially in the SSM, the European Central Bank (ECB) and the European Banking Authority (EBA) will undergo significant changes. This thesis has tried to unravel which powers are dominant in the integration process towards a banking union, and how these political pressures influence the position and powers of the ECB and the EBA. To gain more insight on their institutional setup and the way they have developed over time, the ECB and the EBA will be reviewed and the extent to which they have managed to expand their powers will be analyzed on the basis of Principal-Agent theory. Because of their enormous differences in history, functions, powers and institutional architecture, each institution will be reviewed in its own context. To find out which are the dominant political pressures in the move towards a banking union, the theories of neo-functionalism and liberal intergovernmentalism provide for contradictory expectations on the dynamics of integration. While neo-governmentalism assumes that integration towards a banking union is merely triggered by spillover effects and the pressure that is exercised by institutions, liberal intergovernmentalism claims that national interests are dominant in the bargaining process. These two theories will be tested against the developments in the banking union so far. The conclusion of this thesis is that –although spillovers are on the basis of integration, and the influence of institutions should not be underestimated- national bargains are still most visible in the outcomes so far. For the ECB, this means that its powers are somewhat limited. Also, delay in bargaining processes and the limitation of funding might bring difficulties for its future functioning. The compromises does, however, leave open some space of maneuver for the ECB. The powers of the EBA have been restricted rather than expanded, even though this would fit well with its task in the creation of a single rulebook. Partly because the EBA is a EU 27 institution, expansion of its powers in the field of supervision would require a large change.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics
Programme:European Studies MSc (69303)
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