This presentation (Download 2016_03_BankingUnion) was prepared for a policy audience, on a cluster of interrelated challenges linked to the unfinished nature of the euro area's banking union.
I recommend a broad reform package that would include (1) adoption of the European Commission's proposal for a European Deposit Insurance Scheme, (2) a system of gradually increasing but not country-specific capital charges (or "soft exposure limits") to force banks to diversify their exposures to euro-area sovereigns, and (3) further harmonization of banking law and especially of bank insolvency legislation.
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