Late on Tuesday German Finance Minister Olaf Scholz made a number of proposals on completing the European ‘banking union.’ For the uninitiated: the ‘banking union’ entails a harmonization of regulation, common supervision and – ultimately – a common deposit insurance scheme for the banking system in the Eurozone. The aim is to ‘sever the link’ between banks and the sovereign. No longer should bank borrowing rates and the costs of capital should be based on where the headquarters is incorporated.


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