Banking union’s house of twigs (with cut out and keep optionality)

About that banking union and the aspiration to “break the feedback loop between banks and sovereigns”…

From JP Morgan’s Alex White:

It has been clear for some time that this is not fully achievable in the near term, because of the extent of the institutional journey required (likely including the prospect of Treaty change). For the foreseeable future, Europe’s banks will be left with what Minister Schauble has explicitly referred to as a “timber-framed” Banking Union. This will emphasize that the heavy lifting has to be done at the national level, and will be based around the development of national resolution regimes.