Whether Banking and Supervisory Structures at EU Level Proved Adequate In Responding (Essay Sample)

Whether Banking and Supervisory Structures at EU Level Proved Adequate In Responding To the Debt Crisis
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Banking and Supervisory Structures at EU Level Have Adequately Responded To the Debt Crisis
The debt crisis called for the attention of the European Union (EU) member states to come up with stringent banking and supervisory measures to regulate and supervise the financial operations and such regulations included the introduction of the financial framework for the single market and banking union for the EU.
The development of a comprehensive financial framework that covered a single market put forward tools that curbed the collapse of the EU member banks. Before the establishment of this framework in the year 2010, the EU’s regulatory systems for the banking sector were mainly built on state rescue regulations (Babis, 2015). Therefore, the initial financial regulatory framework could not adequately respond to the 2008 debt crisis in the EU which resulted in the collapse of the banking sector. However, the single market framework for the 28 EU member states puts in place a more robust financial sector in which banks are strictly monitored, supervised and regulated for the benefit of the entire economy. For instance, the new framework requires all banks in the EU zone to use one rulebook to ensure that they all comply with the single set of measures across the market (Howarth & Quaglia, 2016). The single rulebook also ensures that all financial players are subjected to a fair banking playing ground. Additionally, the new framework protects the taxpayers from paying for the blunders committed by the banks (Tsionas, Assaf & Matousek, 2015). Therefore, the single market framework promotes financial stability and sustainability within the euro region.