Abstract:

The financial crisis which started in 2007 originated from the deregulation of financial markets, the lack of regulatory framework governing the operation of supervisory institutions, and the malfunctioning market information system. Public aid for banks in the EU over 5 years (2008-2012) amounted to nearly EUR 4 trillion. Most public aid (75%) was granted to banks in the euro area. The largest government support was provided to the banking systems in Ireland, the United Kingdom, Germany, and Spain. In Ireland it nearly led the state budget to bankruptcy. The crisis resulted in changes in the approach to the security of the financial sector in countries from the euro area. The most important project implemented in response to the financial crisis is the banking union. The banking union is based on three pillars: Single Supervisory Mechanism (SSM), Single Resolution Mechanism (SRM) and Single Deposit Guarantee Scheme (SDGS).