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Plans for a banking union may not be enough to tackle the eurozone’s economic crisis

Kapoor, Sony and Goodhart, Charles (2013) Plans for a banking union may not be enough to tackle the eurozone’s economic crisis. European Politics and Policy at LSE (04 Feb 2013). Blog Entry.

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Abstract

Many commentators advocate a banking union as a partial solution to the eurozone crisis, arguing that it will break the ‘vicious circle’ between weak banks and weak sovereigns. Looking at the current role of the European Stability Mechanism, Sony Kapoor and Charles Goodhart write that a banking union may prove ineffectual because equity cannot be injected into weak banks or be used to tackle past losses, and could not be used without a sovereign guarantee. Instead of potentially increasing their liability, they propose that sovereigns should be shored up so they are better able to support weakened banks.

Item Type: Website (Blog Entry)
Official URL: http://blogs.lse.ac.uk/europpblog//
Additional Information: © 2013 The Author
Divisions: Financial Markets Group
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
J Political Science > JZ International relations
JEL classification: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation
Sets: Collections > LSE European Politics and Policy (EUROPP) Blog
Research centres and groups > Financial Markets Group (FMG)
Date Deposited: 14 Mar 2013 13:20
Last Modified: 28 Mar 2017 14:41
URI: http://eprints.lse.ac.uk/id/eprint/49137

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