Featured Product

    SRB Vice Chair Advocates Establishing a Common Deposit Insurer

    September 09, 2021

    In a recently published article, the Single Resolution Board (SRB) Vice chair Jan Reinder De Carpentier highlighted that more work is urgently needed for a fully integrated system that delivers better crisis management, depositor protection, and a stronger banking sector. He advocated the establishment of a common deposit insurer and a fully mutualized central deposit insurance fund. Urging for the completion of Banking Union, he noted that banks may not yet see the full benefits of the Banking Union because measures have not been agreed to enable deepened cross-border integration, which would then lower their cost base or provide more opportunities.

    The SRB Vice Chair noted that SRB has set out key changes to the system to enable the more effective management of bank failures and European Union has put in place a common deposit insurance framework through the Deposit Guarantee Scheme Directive; however, the system still lacks a common deposit insurer. He pointed out that pooling resources at the central level can create a strong fund, which benefits from increased diversification of risks. He notes that a quantitative analysis of the European Deposit Insurance Scheme proposal confirms that a mutualized central fund will be more efficient than many smaller funds and will reduce the risks faced by deposit guarantee schemes. It would also help address the bank-sovereign nexus. Under a fully integrated Banking Union, costs arising for the central fund will be distributed across the European Union, rather than concentrated in one member state, thus reducing the systemic risks and the procyclicality of the system, where costs arising from a bank failure would otherwise mainly fall on banks within the same country. The introduction of a fully mutualized central scheme would also entail having the same rules across member states, with relevant control at the Banking Union level to align management and resources. He emphasized that the way forward is to make progress on all elements in parallel, with European deposit insurance introduced as part of a holistic set of reforms. "This can then deliver a stronger banking sector, more capable of meeting the needs of the European people as we come out of the Covid-19 crisis and begin to invest in the recovery," said Mr. Carpentier.

     

    Related Link: Article on Completion of Banking Union

    Keywords: Europe, EU, Banking, Banking Union, Crisis Management, Deposit Insurance, Resolution Framework, EDIS, DGSD, SRB

    Related Articles
    News

    ECB Finds Banks Unprepared for Pillar 3 Climate Risk Disclosures

    The European Central Bank (ECB) published results of the 2022 supervisory assessment of climate-related and environmental risk disclosures among significant institutions (103) and a selected number of less significant institutions (28).

    April 21, 2023 WebPage Regulatory News
    News

    NCUA Assesses Credit Union Exposure to Climate-Related Physical Risks

    The National Credit Union Administration (NCUA) released a Research Note that examines the exposure of credit unions to climate-related physical risks. In a related development

    April 21, 2023 WebPage Regulatory News
    News

    EBA Issues Multiple Regulatory and Reporting Updates for Banks

    The European Banking Authority (EBA) is seeking comments, until July 31, 2023, on the draft Guidelines on the proposed common approach to the resubmission of historical data under the EBA reporting framework.

    April 21, 2023 WebPage Regulatory News
    News

    EC Adopts Regulation on Own Funds, Issues Other Updates

    The European Commission adopted Delegated Regulations on own funds and eligible liabilities, on requirements for the internal methodology under the internal default risk model

    April 20, 2023 WebPage Regulatory News
    News

    CDP Platform to Report Plastic-Related Impact, Issues Other Updates

    The Carbon Disclosure Project (CDP) announced that its global environmental disclosure platform has enabled reporting on plastic-related impact for nearly 7,000 companies worldwide

    April 19, 2023 WebPage Regulatory News
    News

    IASB to Enhance Reporting of Climate Risks, Proposes IFRS 9 Amendments

    The International Accounting Standards Board (IASB) updated its work plan to enhance the reporting of climate-related risks in the financial statements,

    April 19, 2023 WebPage Regulatory News
    News

    BIS Addresses Data Gaps and Macro-Prudential Policy for Climate Risks

    The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) published a brief paper that examines challenges associated with the use of macro-prudential policies to address climate-related financial risks.

    April 17, 2023 WebPage Regulatory News
    News

    FCA Sets Out Business Plan, Launches TechSprint on Greenwashing

    The Financial Conduct Authority (FCA) published its business plan for 2023-24. The plan sets out details of the work planned for the next 12 months to achieve better outcomes for consumers and markets

    April 17, 2023 WebPage Regulatory News
    News

    UK Committee Sets Out Recommendations for Next Phase of Open Banking

    The Joint Regulatory Oversight Committee (JROC), comprising the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as co-chairs and the HM Treasury and the Competition and Markets Authority (CMA) as members

    April 17, 2023 WebPage Regulatory News
    News

    ECB Publishes Multiple Regulatory Updates for Banking Institutions

    The European Central Bank (ECB) published the results of the 2022 climate risk stress test of the Eurosystem balance sheet,

    April 17, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8868