EC published a communication that sets out a path to ensure agreement on all the outstanding elements of the Banking Union, based on existing commitments by the Council. EC calls for the completion of all parts of the Banking Union by 2018.
EC urges the European Parliament and the Council to progress quickly in the adoption of measures to tackle remaining risks in the banking sector and suggests new actions to reduce non-performing loans and to help banks diversify their investment in sovereign bonds. The EC communication also aims to give new impetus to the negotiations on the European deposit insurance scheme (EDIS) and maps out the path toward setting up of a last resort common fiscal backstop for the single resolution mechanism. The Banking Union must be completed if it is to deliver its full potential in making the Economic and Monetary Union more stable and resilient to shocks, while limiting the need for public risk sharing. This is beneficial for the entire Single Market.
Valdis Dombrovskis, Vice-President for Financial Stability, Financial Services and Capital Markets Union, said: "We want a banking sector that absorbs crises and shares risks via private channels, thus ensuring that taxpayers are not first in line to pay. Today we are presenting pragmatic ideas to move forward with risk sharing and risk reduction in parallel. We hope that these will be useful food for thought for EU co-legislators to reach consensus on the remaining measures by 2018." This comes ahead of the December Euro Summit, in an inclusive format, where completion of the Banking Union will be part of discussions on further deepening the Economic and Monetary Union. Together with the Capital Markets Union, a complete Banking Union will promote a stable and integrated financial system in the EU.
Keywords: Europe, EU, Banking, Banking Union, SSM, SRM, EC
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