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Italy and the banking union : an assessment of Banca Monte dei Paschi di Siena's precautionary recapitalization

Timmermann, Jan Arend (2019) Italy and the banking union : an assessment of Banca Monte dei Paschi di Siena's precautionary recapitalization.

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Abstract:In the aftermath of the Euro crisis the European states decided on the creation of a banking union as part of the European Union. The banking union is based on two pillars: The Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM). The single supervisory mechanism was established to enhance oversight over big cross- border financial institutions and is institutionalized in the ECB. The single resolution mechanism is another institution created to end the provision of state aid to failing banks and therefore imposing costs for the public. A third pillar that was introduced by the Van Rompoy report envisaged for a third pillar of banking union: the common deposit guarantee scheme. However, this idea was soon dismissed. With the bankruptcy of Monte Paschi di Siena (MPS), the tension concerning the insurance of savers and depositors came to light. This research aims at examining the shift from national interest to approve banking union to the nationalist decision to provide- state aid to MPS by the application of Moravscik’s national preference formation. Generally, this research aims at answering the question: Did Italy’s preference for a common deposit guarantee scheme and a supranational resolution regime affect the articulation of the national interest to provide state aid for Monte dei Paschi di Siena?
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:89 political science
Programme:Management Society and Technology BSc (56654)
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