In the January 2014 economic update for eZonomics, Brosens talks through important building blocks of a banking union that have been agreed.
“The euro crisis made Europe wake up to the fact that while many countries share the euro as their common currency, the countries' banking systems are still organised nationally,” Brosens says.
“Without a banking union, national governments and domestic banks are tied to each other: when one of them is considered less healthy, the other one gets infected.”
Many and profound – but still years away
Brosens details a cascade of new measures that will come into place in the future if a bank gets into trouble.
He says the new measures will make it much less likely that national governments will have to step in. “As the changes are many and profound, it will take a decade before the banking union is fully operational,” says Brosens.
“But when it is, it should make the European financial system stronger and more resilient.”