This dissertation is driven by two research questions. First, what was the role played by European law and institutions in the evolution of the single financial market? Second, how can such evolution explain the creation of the Banking Union, where national competences were ultimately centralised at European level? In order to answer these questions, the dissertation provides the legal history of the Banking Union, starting with the first steps towards a single financial market in 1973 and ending with the creation of the Banking Union in 2013 and its evolution by 2018. The research into this history led to the identification of five phases of market integration. Each phase is characterized by the introduction of distinct legal and institutional innovations – such as the single passport in financial services – aiming at moving forward the integration of the single financial market. Such innovations were often at the boundaries of what could be achieved under the Treaty, while being politically acceptable to Member States. Therefore, the innovations represented in each historical period the outcome of an equilibrium between the expansion of European competences and the safeguarding of national sovereignty. These equilibria remained, however, unstable, as the increasing market integration was not captured by either limited European competences or constrained national sovereignty. Over time, increasing integration led to a build-up of risks, but without a European stabilisation capacity. The risks materialised with the 2007/2008 financial crisis followed by the sovereign debt crisis of the euro area in 2010. Since risk-sharing was excluded in both the single financial market and the Monetary Union, there was a rapid dis-integration process. The soft governance arrangements failed in preventing and managing the crises. The Banking Union then emerged to prevent dis-integration by centralising executive competences, with many legal and institutional implications for European integration. It stopped, however, short of introducing risk-sharing among Member States, despite the significant distributional effects it is bound to have. Together with concerns about the democratic legitimation of such effects, this is the main challenge to its future.