How Does Banking Diversity Fit in the General Vision Inspiring the Joint Process of Banking Union and Capital Markets Union?

The Global Financial Crisis (GFC: 2008–2009) and the Euro Sovereign Crisis (ESC: 2010–2012) seem a process of creative destruction for the European Union (EU). The huge damage provoked by the GFC and ESC was, in fact, followed by important institutional building steps as the Banking Union (BU) and Capital Markets Union (CMU). Their swift introduction suggests that BU and CMU arrived as emergency solutions. With hindsight we may now reassess them. We posit that two unintended side-effects materialised: 1) CMU twisted the balance against banking and in favour of financial markets; 2) BU is, de facto, weakening banking diversity. Thus, even if CMU and BU were successful at reaching EU’s economic goals, their side-effects impair the social and cultural goals equally enshrined in EU treaties. We argue that CMU and BU should be revised to limit the damage to social and cultural goals or, else, other EU policies should be devised to restore the balance.