As the factsheet explains, the basic idea of a European Banking Union goes in the right direction.
However, it will fall short of what is required as long as there is no fundamental reform of the structure of the banking sector. Core elements of such a reform would be:
- Strict separation between conventional business banking and the speculative activities of investment banking.
- Banks that are still too big to fail must become small enough to fail.
- Speculation has to drastically shrink to a level justified to hedge real economy activities.