We analyze the bene ts and costs of a non-euro country opting-in to the banking union. The decision to opt-in depends on the comparison between the assessment of the banking union attractiveness and the robustness of a national safety net. The bene ts of opting-in are still only potential and uncertain, while costs are more tangible. Due to treaty constraints, non-euro countries participating in the banking union will not be on equal footing with euro area members. Analysis presented in the paper points out that reducing the weaknesses of the banking union and thus providing incentives for opting-in is not probable in the short term, mainly due to political constraints. Until a fully- edged banking union with well-capitalized backstops is established it may be optimal for a non-euro country to join the banking union upon the euro adoption. Assessing rst experiences with the functioning of the banking union and opt-in countries will be crucial for non-euro countries when deciding whether to opt-in.
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