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To what extent is Italy trying to keep banking ownership national? : A study on Liberal Economic Nationalism in the Italian banking crisis

Pometto, Gaia (2018) To what extent is Italy trying to keep banking ownership national? : A study on Liberal Economic Nationalism in the Italian banking crisis.

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Abstract:In the aftermath of the economic and financial crisis of 2008, the European Union implemented a set of financial institutions and regulations aimed to strengthen the overall financial stability of the European banking system, and in particular of the Euro-area. The most important among the new measures are Banking Union and the Single Rulebook, which includes the Bank Recovery and Resolution Directive (BRRD). Under the BRRD, and especially since the entrance in force of the bail-in rule in 2016, the use of state-aid is heavily restricted. The entrance in force of the bail-in rule was critical for three Italian banks which were in a desperate need for capital between 2016 and 2017: Monte dei Paschi di Siena (MPS), Banca Popolare di Vicenza and Veneto Banca (V&V). Despite the new rules, however, MPS and V&V crises were eventually addressed through a generous use of state-aid, and the banks were granted the possibility to avoid a bail-in. The present thesis sets out to addresses this apparent contradiction in the two case studies by answering the research question: “To what extent is the Italian government trying to keep the banking ownership national?” In order to answer the research question, the thesis hypothesizes, under liberal intergovernmentalist and sociological institutionalist assumptions, the presence of liberal economic nationalism (LEN) in the Italian government’s decision-making. Two alternative hypotheses are presented, one building on classic LI assumptions of domestic preference formation to formulate what is referred to as Functional LEN; and the other claiming, under neo-functionalist expectations, that the Italian government abode by the rules and LEN was not involved in the decision-making. The Italian government’s decision-making under stress is analyzed by making use of process tracing and inference testing. The outcomes decisively indicate the presence of LEN in the decision-making, albeit it remains unclear which between LEN and Functional LEN better explains the Italian government’s behavior.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics, 88 social and public administration, 89 political science
Programme:Public Administration MSc (60020)
Link to this item:http://purl.utwente.nl/essays/75001
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