Bending and Breaking the Single Resolution Mechanism: The Case of Italy

Shawn Donnelly*, Ioannis G. Asimakopoulos

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

3 Citations (Scopus)
65 Downloads (Pure)

Abstract

This article examines the political economy and law of bank resolution in the case of Italy – spe- cifically, its treatment of three failing banks – the Monte dei Paschi, Veneto and Vicenza banks – which were resolved in 2016–17. These three cases stand out for the relatively large degree of dis- cretion exercised by the national resolution and state aid authorities, ultimately with the permission of their European counterparts. This article examines the motivations of Italian authorities in lobbying the Commission for leeway in applying the bank recovery and resolution directive and analyses the intricacies of the legal framework to underline the extent of discretion exercised by policy-makers. It concludes that the discretion visible in these three cases is not (entirely) contained within EU law, and that bending the law or turning a blind eye to infractions was key to understanding the EU approach to Italy.
Original languageEnglish
Pages (from-to)856-871
Number of pages16
JournalJournal of common market studies
Volume58
Issue number4
Early online date1 Nov 2019
DOIs
Publication statusPublished - 1 Jul 2020

Keywords

  • UT-Hybrid-D
  • Italy
  • bank resolution
  • state aid
  • deposit insurance
  • Banking Union

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