Banking Union : A Federal Model for the European Union with Prompt Corrective Action

The European Commission has published its proposals for the transfer of supervisory responsibilities to the European Central Bank, under Article 127(6) of the TFEU, providing a comprehensive and courageous ‘first step' towards a European banking union, the other steps being European deposit insurance and resolution procedures.The Policy Brief proposes a strengthening of the Commission package through the establishment of a truly federal system and the enlargement of its scope of application to the entire Union. The European Banking Authority (EBA) should remain in charge of all secondary rule-making in the \ domain of banking and supervisory standards should be broadened to include all crisis management powers under a prompt corrective action system à-la-FDIC in the US