The difficulties with the European Union's financial sector's legal regulation
Rīga Stradiņš University, Riga, Latvia
After the 2008 economic downturn the EU has seen an increasing demand for strict regulation, especially in the financial markets whose volatility is being considered as one of the main reasons for the failing of banks and debt problems of sovereign nations. The Treaty Establishing the European Stability Mechanism in 2012 has been a milestone in the initiation of centralized EU policy within the financial sector. The so called Banking Union within the EU is planned to be fully operational in 2016. The author uses descriptive, logical, inductive and analytical methodology to showcase the juristic implications of a centralized financial policy in the EU and submits relevant regulation changes. The conclusion of the paper is that at the time of writing a centralized Banking Union creates the peril of unifying volatility into a systemic risk, because of the nature of debt creation within the financial sector.
© The Authors, published by EDP Sciences 2016
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0 (http://creativecommons.org/licenses/by/4.0/).