Luis de Guindos: Banking union: achievements and challenges
Speech by Luis de Guindos, Vice-President of the ECB, at the High-level conference on “Strengthening the EU’s bank crisis management and deposit insurance framework: for a more resilient and efficient banking union” organised by the European CommissionThe global financial crisis and sovereign debt crisis highlighted the need to make faster progress towards completing EMU.
Speech by Luis de Guindos, Vice-President of the ECB, at the High-level conference on “Strengthening the EU’s bank crisis management and deposit insurance framework: for a more resilient and efficient banking union” organised by the European Commission
- The global financial crisis and sovereign debt crisis highlighted the need to make faster progress towards completing EMU.
- The implementation of these two pillars represents a milestone in European integration and a major success for financial stability.
- But in terms of completing the banking union we are not there yet.
- First, the final pillar: the European Deposit Insurance Scheme (EDIS).
- Second, in the field of crisis management, the tools for dealing with the failure of smaller and deposit-funded banks.
- And third, the role of macroprudential policy and how it can help us deal with shocks to the financial system.
- This is problematic as the level of confidence in the safety of bank deposits may differ across Member States.
- So long as deposit insurance remains at the national level, the link between a bank and its home sovereign persists.
- But we have not yet seen sufficient political will to implement this third pillar of the banking union.
- These differences create an uneven playing field for bank customers and can prevent failing banks from exiting the market smoothly.