The establishment of a European banking union is considered a major step towards addressing the euro area debt crisis. According to a statement at the Euro Area Summit on June 29, 2012, it is intended “to break the vicious circle between banks and sovereigns”.
‘Banking union’ consists of the establishment of a single supervisory mechanism (SSM), under which the European Central Bank (ECB) assumes direct operational powers of prudential supervision for banks in the euro area. Two further elements
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