Progress and perils along the way to a Banking Union

The recent IMF Euro Area Financial Sector Assessment Program undertook an in-depth, critical examination of euro zone financial sector policies and especially the functioning of the Banking Union. The presentation will start from an overview of the financial strengths and weaknesses of the main euro area banks; suggest where progress has been made in strengthening banking supervision and where hindrances to the effectiveness of the Single Supervisory Mechanism remain; and review the design and functioning of the system for banking crisis preparedness and management. It will be argued that more coherence in the crisis management system is essential for reducing risks and levelling the playing field across the banking union.