Varieties of Financial Capitalism, Economic Nationalism and Bank Resolution in the Eurozone

This paper examines the roots of economic nationalism involved in bank restructuring and resolution within the Single Resolution Mechanism of Banking Union, focusing on the cases of Italy, Germany and Spain. The paper looks at the motives and actions of national and local government authorities in bending, breaking and applying the Bank Recovery and Resolution Directive, and the Single Resolution Regulation, and of the Commission and Single Resolution Board in allowing and/or restricting non-compliance with EU law. Is the law being broken, or merely bent? Under what conditions? And with what effect? The main hypothesis is that national varieties of financial capitalism sometimes drive national and local governments to resist application of EU law. This is where there is a combination of strong financial fragility within the bank, and situations in which compliance would initiate economic disruption affecting a large portion of the electorate.