In some cases, banks have grown so much that their failure would, on the one hand, endanger the financial system of several countries at the same time, but on the other hand, be too large for the national government of the home country to be supported in case of stress13 and thereby causing or exacerbate funding problems of the sovereign, which might further destabilize the banking sector.14 For both reasons, a euro area wide resolution authority would be very beneficial.
Maintaining high analytical quality is, indeed, one of the core strategic goals of the Bundesbank. [4] Therefore, we have been very careful observers of the initiative for evidence-based policy that the  Verein für Socialpolitik (German Economic Association) has developed under the leadership of Professor Monika Schnitzer from the University of Munich.