A key component – from a financial stability angle – is the Single Resolution Mechanism. In future, private sector owners and creditors are to be forced to shoulder the cost of restructuring or resolving banks. 5. But the banking union alone will be unable to loosen the sovereign-bank nexus because sovereign exposures continue to enjoy privileged regulatory treatment.
Budgetary positions close to balance or in surplus in good years allow automatic stabilisers (cyclically-related lower tax revenue, higher costs of unemployment) in economically bad years. –  Practical experience (eg abeyance if a member state has promised to take measures which have not yet been implemented) has shown that the monitoring and infringement procedure is quite time-consuming.