The Banking Union is one of the most important and ambitious projects
launched by the European Union in the last ten years. With supervisory
and resolution mechanisms for Eurozone banks now up and
running, the current narrative is that most of the work to create the
Banking Union is complete. This paper disputes this view, arguing that
the persistence of financial protectionism – or “ring-fencing” – at Member
State level significantly erodes the effectiveness of the Eurozone’s
single supervisory and resolution mechanisms. It formulates concrete
recommendations and calls for a political leap of faith from Eurozone
Member States to cease ring-fencing practices
