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Unravelling economic solidarity – a systemic view on risk-sharing in the European banking sector

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The policy contribution examines the concepts of economic solidarity and responsibility, with a particular focus on the Banking Union and some of its unresolved crisis management issues. The authors argue that both principles of solidarity and responsibility are interconnected and must therefore be included in the architecture of the EU’s financial system. The contribution concludes by briefly proposing an enhancement of a solidarity dimension in the Banking Union design.

FSC Research Workshop 2019
29 October 2019
Policy paper contribution
Source: Financial Risk and Stability Network

Authors:
Maria Cecilia del Barrio Arleo, University of Trento
Yuri Biondi, French National Center for Scientific Research – CNRS

PDF  >  Unravelling economic solidarity – a systemic view on risk-sharing in the European banking sector

The policy paper has been prepared as an accompanying contribution to the Financial Stability Conference 2019 in Berlin and presented at the FSC Research Workshop the following day. Researchers from various institutions were invited to draft policy papers on aspects of the conference topics and financial stability issues to be presented and discussed at the workshop.
Abstract

The policy contribution aims to overcome the unfertile debate that opposes the notions of risk sharing and risk reduction, by examining the concepts of economic solidarity and responsibility, with a particular focus on the Banking Union and some of its unresolved crisis management issues. The contribution adopts a money-centric view on banking, which highlights the interconnectedness between monetary policy design and the banking sector, arguing that both principles of solidarity and responsibility are interconnected and must therefore be included in the architecture of the EU’s financial system. The empirical review comparatively examines the EU and US cases in order to draw concrete lessons from them. The contribution concludes by briefly proposing an enhancement of a solidarity dimension in the Banking Union design.

 

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