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Addressing a German mutual banking event in Frankfurt, Mr Draghi said: “Financial union does not have to imply the pooling of deposit guarantee schemes, an issue that I know is of concern in this country. Organising and funding deposit guarantee schemes can remain a national responsibility, with comparable effectiveness.”
While Mr Draghi’s comments chime with the thinking of officials in Brussels, it was the most explicit acknowledgment yet that plans for a single deposit guarantee scheme, already shelved, may not be revived.
Establishing a common backstop for the €5 trillion of deposits in the eurozone has proved by far the most politically contentious element of Europe’s drive to form a banking union. Since the autumn, Member States led by Germany have been gradually scaling back ambitions for when and how a single deposit insurance scheme should be established.
As recently as two weeks ago, Vítor Constâncio, Mr Draghi’s deputy, told a committee hearing at the UK House of Lords that he believed such a scheme would follow common supervision and bank resolution arrangements, although “not in the very near future” as there were concerns about “potential significant commitments” by Member States.
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Draghi speech © ECB