The issue of financial stability has become relevant in the last decades of the last century due to frequent banking crises. For these reasons, financial stability, i.e. achieving and preserving the stability of the financial system, is increasingly defined as an explicit goal of the central bank, with the growing importance of financial stability policy within the overall economic policy. Achieving and maintaining financial stability is not an easy task and requires the design of an appropriate regulatory framework that includes various institutions, rules and procedures. The regulator’s approach is determined by the specifics of a particular financial system, and is a particularly sensitive issue in complex financial systems, such as the US and EU financial systems. The issue behind the subject of this doctoral dissertation, as well as the research framework itself, is the global financial crisis that marked the end of the first decade of the 21st century and influenced the instituti...onalization of the new architecture of the EU financial stability. Financial stability and its sustainability are based on the fact that the EU is not a homogeneous system economically speaking, and that the member states are fundamentally completely different in terms of development level and macroeconomic indicators. Having in mind that the Eurozone member states achieved certain homogeneity by defining and implementing a single monetary policy, the dissertation uses the VAR model (vector autoregression) to examine the efficiency of the interest rate channel as a transmission mechanism of monetary policy in two subperiods: pre-crisis period (2004-2009) and post-crisis period (2009-2017). The research results confirm the insufficiently efficient interest rate channel and indicate the need for the application of non-standard monetary policy measures of the European Central Bank (quantitative easing, asset repurchase). The lack of a unified financial stability policy at the EU level, in the context of its indispensable elements (regulation and supervision, deposit insurance and restructuring and exit policies of banks), as well as limited fiscal capacity of member states prevent timely and adequate EU response to the global financial crisis. Institutional architecture, with more decisions on financial and economic policies made at EU level, implies better-equipped mechanisms. The banking union, as a gradualist attempt at stronger integration at the EU level, can have a positive impact on the EU’s macroeconomic performance in the long run. However, due to the different focus of individual EU member states, elements of the new architecture of financial stability are focused primarily on preserving the common currency, and very little on essential integration and building a platform for early identification and prevention of future crises. Given that the effect of non-standard
measures in the long run, especially in the post-crisis period, brings new potential financial tensions, as well as that the banking union functions as a crisis management mechanism and not as a crisis prevention mechanism, the newly formed financial stability architecture can be a guarantor of financial stability in the long run with the introduction of a new pillar of EU integration – fiscal union.
