The Banking Union (with a single supervisor, a Single Resolution Mechanism and – a yet-to-be-established but of utmost importance – common European Deposit Insurance Scheme) has helped create a better integrated, more efficient and well capitalised European banking sector. Coupled with the completion of the Capital Markets Union, it can support the single market and fund investment and growth.
Fourth, many challenges remain and a lot still needs to be done. The financial system continuously innovates and the work of regulators comes with a lag. In fact, certain large financial institutions that conduct activities similar to banks but have no banking license – what we call shadow banks – remain insufficiently monitored and under-regulated.