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The financial crisis that affected the European economies in 2007-2008 initially started

in the United States. This financial crisis was a result of fore-closure of sub-prime debts leading

to a drop in profits in the banks in U.S. European lending institutions widely implemented the

same business models before the financial crisis the reason why economies in the European

Union ware mainly affected (Burke,2016). To avert harshness of an impending financial crisis,

accounting bodies and various countries have from then obligated for an evaluation of

administration and regulation of lending societies in the European Union. This essay focuses on

the projected strategies, the business structure of the banks, their fluidity, and efficacy.

Furthermore, it evaluates if the banking and administration in the European Union were

efficient in responding to the financial crisis (Herbermas & Cronin, 2012)

The EU reinforced the coordination of policy and arrangement in the body members in

response to the debt crisis; this was achieved by employing “Six-pack,” a lawmaking set built

on financial domination. This set strengthened the official policy “Stability growth and Pact”

(SGP) precisely in the sector of monetary policy (Govaere, Lennon, Elsuwege, Adam, &

Maresceau, 2013). They introduced a new lawmaking package in May 2013 known as “the two-

pack,” which had two primary goals; to enhance fiscal surveillance in the EU region by

improving the supervision of associate states with severe financial instability.

Moreover, to better the management of economic schemes via outline of timelines for

the financial processes in the EU region (Olsson, 2009)

Due to the failure of the previous framework in responding to the financial crisis in time,

the debt crisis shown a severe shortage in the commercial facilities sector. To avert a similar

situation in the future, the EU formulated new authorities to manage fiscal organizations. These
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authorities included; the European Banking Authority (EBA), the European Securities and

Markets Authority (ESMA), the Systematic Risk Board for Macro-prudential Supervision

(SRBMS), and Occupational Pension Authority (EIOPA) (Wymeersch, Hopt, & Ferrarini,

2012). Besides, the assembly backed for the rationalization of banking organizations to better

the efficacy of the fiscal policies. They also implemented central supports like the Capital

Requirements Directive (CRD), which gathered functional necessities for banking organizations

(Jackson, 2010).

The EU’s strategies towards the financial crisis are starting to bear fruits, and there is no

likelihood of reoccurrence of such a crisis in the banking sector int the future. Thus, we can

settle at the conclusion that the administration and banking systems employed by the EU have

shown effective in responding to the debt crisis. The Union's goal is to put measures so that the

financial crisis does not occur again. To reinforce the management of monetary policies

associated with the EU, new government edifices are anticipated to be implemented

consistently. European Commission will supervise the execution of the new strategies and

manage particular situations and economic performance (Sharma, 2014).

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References

Burke, J. (2016). Weathering the Storm, Volume Two: The Financial Crisis and the EU

Response

(1st Ed.). NEW YORK: Business Expert Press.

Govaere, I., Lannon, E., Elsuwege, P., Adam, S., & Maresceau, M. (2013). The European

Union in the world (1st Ed.). Martinus Nijhoff Publishers.

Habermas, J. & Cronin, C. (2012). The crisis of the European Union (1st Ed.). Cambridge, UK:

Polity.

Jackson, J. (2010). Financial Crisis: Impact on and Response by the European Union (1st Ed.).

DIANE Publishing.

Olsson, S. (2009). Crisis management in the European Union (1st Ed.). Berlin: Springer.

Sharma. (2014). Global Financial Contagion: Building a Resilient World Economy after the

Subprime Crisis (1st Ed.). Cambridge University Press.

Wymeersch, E., Hopt, K., & Ferrarini, G. (2012). Financial Regulation and Supervision: A

postcrisis analysis (1st ed.). OUP Oxford.

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