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Completing the Eurozone banking union: What must be done

Borri, Nicola, Reichlin, Pietro, (2016), “Completing the Eurozone banking union: What must be done”, Voxeu, 4 Μay

Most commentators agree that a European banking union would end the ‘deadly embrace’ between creditors and governments. This column argues that a banking union would be welcome, but that current proposals are dogged with problems. To resolve these, we should stop discussing debt restructuring and instead enhance the borrowing capacity of the European Stability Mechanism. A programme to buy capital in financial institutions unable to raise it directly on the market should also be set up.

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