National vs. Supranational Banking Supervision

The reluctance of nation states to concede authority to supranational institutions runs to the very heart and history of European integration. The global financial crisis and the ensuing Eurozone sovereign debt—banking crisis shed new light on this debate however. The aim of this workshop is to explore two overarching questions. (1) Why do nation-states transfer regulatory and supervisory authority over banks to supranational institutions? (2) What are the distributional consequences of such a transfer? The questions are particularly timely given that, on the one hand, the financial and debt crises have heightened the need for more coordinated and supranational regulatory supervision. On the other hand though, the social, political, and economic fallout of the crises have increased the incentives for political authorities to pursue a more active and involved management of their domestic banking systems. This presents a seemingly uncomfortable dilemma for nation states that we seek to explore.