Vienna Initiative: What did we learn?

The Vienna Bank Coordination Initiative ("Vienna Initiative") is currently celebrating its 10th anniversary (see also a Discover CEE post). It is a pleasure and honor that the long-standing and established CEE banking sector coverage at Raiffeisen RESEARCH (CEE Banking Report) and cooperation with key stakeholders (including Deborah Revoltella from the EIB) resulted now in an interesting joint contribution by Rachel Epstein (a leading US expert on European banking sectors at the University of Denver, author of "Banking On Markets: The Transformation Of Bank-State Ties In Europe And Beyond") and myself in the EIB's latest work on the Vienna Initiative. 

Rachel's and my key conclusions are the following: “[…] The experience of the VI (Vienna Initiative) has shown that effective banking sector crisis management requires a certain alignment of interest between the public and private sectors. Such an alignment could be supported by deep equity-based banking sector integration that transcends national thinking in the banking sphere. […] Such an integrated market may bring a degree of individual or systemic risk concentration. However, the VI framework has shown that such risk concentration does not necessarily increase financial instability risks if and when effective crisis management is able to meet the long-term interests of all relevant actors in the public and private sector.”