Banking Union as a Shock Absorber

The study explores the contrasting effects of banking unions on regional financial stability, focusing on the federal system in the USA versus the Eurozone. It highlights how the U.S. banking union effectively absorbs financial shocks at a regional level, while the European model has resulted in significant regional dislocation and tensions, particularly within the Eurozone. The analysis provides insights into the mechanisms and outcomes of these two banking systems in response to financial crises.