While European banks support the completion of the Banking Union with the creation of a single European Deposit Insurance Scheme (EDIS) as its third and final pillar, the process and pace for the introduction of this scheme is surprising given the EU’s Better Regulation initiative. The EDIS proposal requires careful examination.
The EBF wants to ensure that the European deposit insurance scheme will not lead to increases in overall contributions that banks make to deposit guarantee systems. The EBF also believes that the scheme should be clearly integrated in the Banking Union framework such that the scope of banks mirrors closely the scope of the single supervisory and resolution mechanisms.
The European Commission first needs to make sure that EU Member States fully transpose the EU directive on Deposit Guarantee Schemes (DGS), which sets out common EU requirements for national schemes, in order to provide a harmonised framework for all participating countries in terms of tools and funding resources for EDIS.
The EBF meanwhile is pleased to see that the European Commission communication on the EDIS proposal recognizes the significant improvement in the general health of the European banking sector with a reference to the 2014 Comprehensive Assessment. This assessment confirmed that the balance sheets of the largest banks in the Banking Union now are sufficiently resilient even when tested for significant economic and financial stress.