is the Olimpiad S. Ioffe Professor of International and Comparative Law at the University of Connecticut School of Law, where he is also Director of International and Graduate Programs. He holds a B.A. and J.D. from Cornell and a Ph.D. in European history from Columbia. His expertise lies at the intersection of European integration, comparative administrative law, international economic law, and the legal history of public governance. His work seeks to develop new insights into the fields of historical institutionalism, principal-agent theory, and governance beyond the state with implications well beyond the case of European integration in which he specializes. Professor Lindseth has served as a visiting professor at Yale, Princeton, Tilburg (as KNAW Visiting Professor), the Université Panthéon-Assas Paris II, and the Université d’Aix-Marseille III, and he has also taught at Columbia Law School. He is currently serving a two-year term as visiting professor in the law and history of European integration at Queen Mary-University of London. He has also served as a Daimler Fellow at the American Academy in Berlin, a Jean Monnet Fellow at the European University Institute in Florence, a Chatauebriand Fellow at the Conseil d’Etat in Paris, and aStipendiatat the Max Planck Institute for European Legal History in Frankfurt. He was the founding chair of the European Law Section of the Association of American Law Schools (AALS) and the editor of the section’s blog,europaeus|law. Professor Lindseth also contributes toEUtopia Law, a London-based blog on the European Union.
Peter L. Lindseth
European Banking Union as a Case-Study in Institutional Change
A banking union stands on three pillars: bank supervision, resolution authority, and deposit insurance. The US has had these three pillars in place since the New Deal. The EU, by contrast, has sought to recreate some (but not all) of those pillars in the midst of the Eurozone crisis. The European Central Bank (ECB) will gain supervisory authority over Europe’s largest banks (some 130 or so) but the remainder (some 6000) will stay under national supervision. Europe is also creating a common resolution mechanism but bank closures will remain subject to an effective national veto, while recapitalization, if any, will depend heavily on creditor “bail-ins” in order to protect the public fisc. And the third pillar of a workable banking union—a common regime of deposit insurance—has proven to be a bridge entirely too far. It involves too great a risk of fiscal burden-sharing between the so-called core (led by Germany) and the Eurozone periphery. Consequently, deposit-guaranty schemes will remain a national obligation, subject to certain common rules. The result is a still-deeply fragmented European Banking Union—and indeed, monetary union—with variable country-specific risks and interest-rate differentials. This project will argue that Europe’s emergent banking union reflects a deeper process of institutional change described in my book Power and Legitimacy: Reconciling Europe and the Nation-State (OUP 2010). In this legal-historical dynamic, certain kinds of regulatory power (e.g., monetary policy, bank supervision) are capable, at least in part, of delegation to supranational institutions. However, other powers (i.e., ones demanding strong democratic legitimacy like taxation, spending, and borrowing) have remained national. The reason is that these latter powers demand the “legitimacy resources” that, at this point in Europe’s history, only national institutions can still muster.