EU-IDEA Policy Paper nº 4 (August 2020)
Five years after the entry into force of the Banking Union, this Policy Paper assesses its effectiveness as a form of differentiated integration. This case study presents the legal and organisational dimensions of the Banking Union and describes its accountability mechanisms and procedures. At the heart is the question of whether the creation of the Banking Union has been effective in promoting integration among its members while avoiding distortions in the Single Market. To this end, also the impact of the Banking Union on the political unity in the European Union is analysed. This Policy Paper finds that the Banking Union has enhanced European integration in the financial sector without jeopardising the functioning of the internal market. Although the Banking Union is still incomplete, the benefits of participation create centripetal forces that are attractive also to non-euro countries.