The Banking Union can thus be seen as the biggest reform after the inception of the euro with vast implications that go well beyond the problem of the sovereign-banks’ loop. In this way, the question of direct European recapitalisation – for which a framework has not yet been decided – ceased to be the main focus of attention.
In the view of many commentators, the Single Resolution Mechanism became the expected instrument to achieve the separation between banks and sovereigns. This is a somewhat misleading view, as I will explain later.