Despite the experience of the ongoing sovereign debt crisis, European banks continue to hold large amounts of bonds from their home governments. This ties the fates of the sovereign and the banks together, leading to the disruptive self-reinforcing feedback loops that brought the euro area to...

Cross-border banking is currently not stable in Europe. Cross-border banks need a European safety net. Moreover, a truly integrated European-level banking system may help to break the diabolical loop between the solvency of the domestic banking system and the fiscal standing of the national...

Following the June 2012 European Council decision to place the ‘Single Supervisory Mechanism' (SSM) within the European Central Bank, the general presumption in the policy discussions has been that there should be ‘Chinese walls' between the supervisory and monetary policy arms of the ECB....