Given the complexity of the matter, this has been rather swift, not only by European decision-making standards. The motion to set up a banking union has been an integral part of the response to the crisis. Consequently, banking union must be seen in the wider context of the new European financial architecture.
The crisis exposed a host of weaknesses in the banking sector, ranging from a dramatic increase of nonperforming loans, which required banks to repair their balance sheets and triggered a process of deleveraging, to an impaired profitability that undermined the capacity of banks to retain earnings.