Are better defined rules enough? An assessment of the post-crisis reforms of the governance of EMU

The extensive economic governance reforms in the euro area since 2010 have put in place a system (EMU 2) that is intended to be more intrusive, prescriptive and enforceable in constraining Member State economic policies. It can be characterized as a recasting of the stability-orientated framework which is intended to correct the acknowledged shortcomings of the original set-up (EMU 1), but does not fundamentally alter the policy model. Rather its ambition is to be more effective, notably in implementation. This article revisits the economic arguments for monetary integration and considers whether the core features of the new model and the economic logic that underpins them will improve the governance of EMU in assuring macroeconomic stability. It draws attention to remaining gaps in the governance system and discusses possible further reform

Domestic preferences and European banking supervision: Germany, Italy and the Single Supervisory Mechanism

What explains regulators\u2019 preferences concerning the Single Supervisory Mechanism (SSM)? The paper answers this question by providing an alternative account of the creation of the SSM using an institutionalist perspective. It is argued that the creation of the SSM does not simply reflect the material interests of governments and domestic financial firms, but that regulators\u2019 positions were also significantly affected by the institutional environment in which they operated. Two characteristics of domestic supervisory governance are identified: the institutional responsibilities of banking regulators (microprudential and/or macroprudential) and the fragmentation of supervisory and monetary policies. The empirical analysis demonstrates the relevance of these factors for shaping regulators\u2019 preferences both within and across countries