Setting up an agency that is capable of resolving (shutting down, selling or recapitalizing) banks is perhaps the most urgent part of such a banking union and can be done independently from pooled deposit insurance or common supervision, but is not being prioritized by EU leaders and will still take a long time to be set up.
I believe that for the crisis to end, two things have to happen: the defaults by insolvent governments must be formalized, so that creditors know exactly how far to mark down the value of their holdings; insolvent banks must be resolved, as Kapoor defines resolution.
The new agreement accomplishes neither of these. The financial markets were pleased. As is often the case, I am baffled by the markets.