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The missing European Deposit Insurance Scheme

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National and Kapodistrian University of Athens - Research Centre for Economic Policy, Governance and Development   

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The missing European Deposit Insurance Scheme (EN)
Bazoti, Pery
The European Banking Union embarked as a highly ambitious project of the European Union as a response to the signifi cant fl aws and weaknesses in the original architecture of the European Monetary Union that became apparent during the economic crisis. However, the establishment of a single European banking system has stumbled upon the creation of a common deposit insurance scheme that could safeguard depositors and create a more stable fi nancial framework in the euro area. The European Deposit Insurance Scheme (EDIS) was fi rstly introduced by the European Commission in 2015. As a bold proposal that comprises wide risk mutualization among the euro area member states, it has spurred a vivid discussion in the European public speech and many proposals have been made since then altering its original planning in an effort to tackle the moral hazard concerns that have risen. The present article, after discussing the reasons that keep obstructing EDIS, presents these suggestions that move around, primarily, the role of the national deposit guarantee schemes. However, as highlighted in the article, before moving to any alterations on the structure and role of a proposed common deposit insurance scheme, signifi cant risk minimization on behalf of the national banking systems, must precede by limiting the sovereign exposures of banks and the size of the Non-Performing Loans. Such steps of risk minimization are critical for addressing concerns and the political unwillingness demonstrated by several European countries in moving forward towards deeper integration. (EN)
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
risk mutualization (EN)
European Banking Union (EN)
European Deposit Insurance Scheme (EN)
moral hazard (EN)
National and Kapodistrian University of Athens - Research Centre for Economic Policy, Governance and Development
Region and Periphery
Research Note
Περιφέρεια
English
2020-07-29
https://ejournals.epublishing.ekt.gr/index.php/periphery/article/view/23789
National and Kapodistrian University of Athens (EN)
2241-1380
2623-4920
Περιφέρεια; Αρ. 9 (2020); 151-158 (EL)
Region & Periphery; No. 9 (2020); 151-158 (EN)
https://creativecommons.org/licenses/by-nc/4.0
Copyright (c) 2020 Pery Bazoti (EN)



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