Banking Crisis Management In The EU: An Interim Assessment

It would certainly not be an overstatement to say that the European Union (EU) was institutionally ill-prepared to manage a financial crisis, especially one involving systemic cross-border institutions. The paper is organized as follows. Section 1 describes the pre-crisis EU banking landscape in terms of both market integration and crisis management arrangements. Section 2 describes the main banking events and the policy responses since the start of the crisis. Section 3 presents the assessment of the management of the crisis using first the pre-crisis institutional arrangements and then the EU arrangements deemed desirable by the literature as benchmarks. Section 4 concludes with a discussion of policy lessons and the choices ahead.