The global financial crisis (GFC) in 2007/2008 started with the U.S. sub-prime mortgage crisis in 2007, turned into the Eurozone crisis in 2010 which showed the fragility of the banking system. The European Council decided to create a banking union to centralise supervision and resolution for banks in the euro area in order to avoid new crises in the euro zone and rebuild investor confidence in the banking sector. In general, the banking union should ensure stability and transparency of the financial system and support EU economy.
The Banking Union is based on three pillars: the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism (SRM) and Deposit Guarantee Schemes (DGS).
The Single Supervisory Mechanism is controlled by the European Central Bank (ECB) and will check that banks comply with rules and capital requirements.
The Single Resolution Mechanism will manage crisis resolution. It is made up of a board (Single Resolution Board – SRB) and a fund (Single Resolution Fund – SRF) financed by the banking sector.
The ECB (European Central Bank) will inform the board if a bank is in trouble and the SRB will be responsible to take action. From January 2016, the Board will be fully operational and should protect taxpayers from banks’ failures. This new board will also modify the duties of the already functioning European Banking Authority (EBA).
The Deposit Guarantee Schemes, together with the SRF, will reimburse a limited amount of deposits to depositors whose bank has failed. From the depositors’ point of view, this protects a part of their wealth from bank failures. From a financial stability perspective, this promise prevents depositors from making panic withdrawals from their bank, thereby preventing severe economic consequences.
These mechanisms are regulated by the Single Rulebook, consisting of common rules that all financial institutions (including approximately 8300 banks) in the EU must comply with. These rules lay down capital requirements for banks, ensure better protection for depositors, and regulate the prevention and management of bank failures.
I searched the Web and referred to financial newspapers and EU official websites to draft a glossary that may help translating these terms. In some cases, I found more than one term.
Any suggestions (also in other languages) are more than welcome!
|Banking union||Unione bancaria||Bankenunion||Union bancaire|
|Single Supervisory Mechanism||Meccanismo di vigilanza unico||Der Einheitliche Aufsichtsmechanismus||Mécanisme de surveillance unique|
|Single Resolution Mechanism||Meccanismo unico di risoluzione (delle crisi)||Der Einheitliche Abwicklungsmechanismus||Mécanisme de résolution unique|
|Capital requirements||-Requisiti di capitale
-Criteri di patrimonializzazione
|Eigenkapitalvorschriften||Exigences en fonds propres|
|Deposit Guarantee Schemes||Sistema di garanzia dei depositi||Einlagensicherungssysteme||Systèmes de garantie de dépôts|
|Single Resolution Board||Comitato unico di risoluzione||Ausschuss für die einheitliche Abwicklung||Conseil de résolution unique|
|Single Resolution Fund||Fondo di risoluzione unico||Einheitliches Abwicklungsfonds||Fonds de résolution unique|
|Single Rulebook||Single Rulebook
Corpus unico di norme (cfr. Eur-lex)
Regole uniformi in tutto il mercato unico (cfr. Sole24ore)
europeo di regolamentazione bancaria (cfr. Wall Street Italia)
Link to the European Commission page on the Banking Union
Link to the Single Resolution Board website
Link to the Single Rulebook
A Roadmap towards a Banking Union (You can select your language for bilingual display)