Much has been written about European banking union and Germany’s role in shaping it. Missing, however, is a comprehensive explanation for Germany's contradictory positions on banking union: German policymakers gambled… Click to show full abstract
Much has been written about European banking union and Germany’s role in shaping it. Missing, however, is a comprehensive explanation for Germany's contradictory positions on banking union: German policymakers gambled on a single supervisory mechanism, and a single resolution mechanism yet drew the line on European-wide deposit insurance. We explain Germany’s mixed positions on banking union by drawing on prospect theory and theories of policy salience.
               
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