Executive summary The purpose of this paper is to give an account of the debates regarding the implementation of a banking union in Europe that took place in Bruges in April 2013 at a Conference co-organised by the College of Europe and the European Commission's Joint Research Centre (JRC). The benefits to be expected from the banking union are reviewed. Then its components are analysed and discussed with a special focus on supervision and resolution of banks. The challenges are both functional

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... and institutional. They involve micro-and macro prudential considerations. As regards the ECB, will there be possible conflicts of objectives and conflicts of interest when it cumulates its monetary policy function with its new supervisory role? For banking supervision, how to combine the division of labour between the ECB and the national competent authorities with the necessary coordination between them? The same kind of challenge applies to resolution and deposit insurance. The paper relates the transition to a banking union to other structural issues such as the separation of bank activities and the financing of the real economy in the new regulatory framework.