Internationalised banking, alternative banks and the Single Supervisory Mechanism

Abstract

This paper sets out to explain the preferences of the seven northern euro area member states on the Single Supervisory Mechanism (SSM) concerning the threshold set for direct European

Public Attention, Governmental Bargaining, and Supranational Activism: Explaining European Integration in Response to Crises

“…German industrial associations in turn feared a renewed credit crunch and the disturbance of the Single Market in case of non‐action (FAZ, ), and consequently lobbied the German government as well. Concerning financial market regulation, both German and French private banks aimed to achieve harmonious supervision (Howarth and Quaglia, , p. 455f). The German government, however, tried to avoid conflicts with the local and regional political patrons of the smaller Sparkassen (savings banks), which were strongly opposed to supranational control.…”

“…Consequently, Germany preferred ECB oversight for large banks only. France, which has a much more centralized banking sector, by contrast supported fully harmonized banking supervision (Howarth and Quaglia, , p. 455f).…”

“…Arguably, the exceptionally high degree of political integration in monetary policy (Leuffen et al ., , Ch. 6) and the strong integration of European financial markets at the outset of the crisis (Howarth and Quaglia, ) turn the EMU into an area that falls somewhere in between a classical ‘core state power’ and an internal market‐related policy area. When economic actors are directly affected by integration decisions in the EMU, they have a strong incentive to approach their governments with proposals for policy change that maximizes their interests.…”

“…While the Euro Crisis put the sheer existence of the European integration project into question and stirred the public and academic debate on European disintegration (Vollard, ; Webber, ), EU and/or euro area Member States ultimately adopted a range of decisions that predominantly deepened integration in fiscal and economic policy (Schimmelfennig, , p. 190 ff ), but also concerned financial market and banking regulation (Howarth and Quaglia, ). In order to create a legal base for the newly set up European Stability Mechanism (ESM), the EU moreover changed its primary law by adding Art.…”

Domestic preferences and European banking supervision: Germany, Italy and the Single Supervisory Mechanism

“…likely to oppose the supranationalisation of supervision (Howarth and Quaglia 2016). 2 The OEP approach also generates the expectation that the crisis contributed to reconfiguring member states' preferences with regard to the banking union by polarising the interests of creditor and debtor countries as the link between the vulnerability of states and banks became apparent (Epstein and Rhodes 2016).…”