[01] Dimitrios Tsoutsas, Department of Economics, University of Thessaly, Volos, Greece.

This study offers a critical view on the feasibility of the Eurozone being more integrated in terms of monetary, fiscal and banking cooperation. It analyses imbalances among Eurozone peripheries and differences in national regulatory schemes and how this could affect the potential of a banking union. The special conditions of unconventional monetary policies and indebtedness of separate countries are taken into consideration and emphasis is attributed to the credit-oriented character of the banking system in European countries. The main focus of this study lies in risk- and debt-sharing of the financial sector between Eurozone member peripheries. Moreover, moral hazard incentives from the side of banking institutions are analyzed and bail-in or bail-out decisions are discussed by employing different scenarios. Notably, the interconnectedness between national financial sectors within the Eurozone is discussed. The analysis is also relevant to the possibility of bank runs and liquidity drainage that render the Eurozone banking system more vulnerable on economies of scale and leverage powers.

Eurozone Peripheries, Debt Mutualization, Banking Union

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