Resolution and the Banking Union: a Revolution in the European Union? The Emergence and Implementation of New Modes of Banking Crisis Management Tools in the EU Multi-Level Governance System

What explains the diffusion of new financial regulatory norms in systems of multi-level governance? After the financial and sovereign debt crisis, resolution has been adopted as a common banking crisis management through the harmonisation of law in the EU (Bank Resolution and Recovery Directive, 2014), and the banking union in the Eurozone with a single supervision and resolution, entailing sweeping changes in banking regulation. Resolution aims at organising bank failures and the ‘bail-in’ processes. The Europeanisation of banking crisis management, whether through its harmonisation or the creation of common regulatory bodies (Single Resolution Board, Single Supervisory Mechanism, European Banking Authority) has significantly transformed financial regulation. How and why have member states accepted such reforms? To which extent are national regulatory practices being Europeanised? What are the challenges of implementing multi-level banking crisis management in the EU? The paper explains the adoption and functioning of these reforms in the EU multi-level governance system. It uses interviews conducted within relevant EU institutions and with regulators from ministries and central banks at national levels, comparing France, UK, Germany and Spain.