The Eurozone crisis has gone through its fair share of buzz words — fiscal compact, growth compact, Big Bazooka. The latest kid on the block is the banking union. Although it has been discussed by economists since even before the 2007 crisis, it has moved up to the top of the Eurozone agenda. But what kind of banking union? For whom? Financed how? And managed by whom?
A new collection of short essays by leading economists on both sides of the Atlantic — including Josh Aizenman, Franklin Allen, Viral Acharya, Luis Garicano, and Charles Goodhart — takes a closer look at the concept of a banking union for Europe, including the macroeconomic perspective in the context of the current crisis, institutional details, and political economy. The authors do not necessarily agree and point to lots of tradeoffs. However, several consistent messages come out of this collection: