In a document, the Commission noted that the bloc’s financial institutions are “well capitalized, closely monitored and have good liquidity.”
However, in case of difficulties, countries have to resort to taxpayers’ money rather than to national deposit guarantee systems that are financed by the banking sector itself.
In general, the Commission proposal aims to “protect the real economy from the impact of bank failure”, for example by encouraging States to transfer accounts from a failing bank to a healthy establishment.
Finally, if the protection of deposits is maintained at the level of 100,000 euros per depositor and per bank, the text harmonizes the standards throughout the EU, extending the protection to deposits from public entities such as hospitals, schools or municipalities.
The recent collapse of US banks Silicon Valley Bank (SVB) and Signature Bank, followed by compatriot UBS’s emergency takeover of Credit Suisse, has recently raised fears of a broader crisis in the banking sector. .
However, this reform is not “a reaction to these facts,” the Commission insisted.
A unified deposit guarantee system for the whole EU would make it possible to complete a banking union, but such an initiative is challenged by Germany and other northern bloc states, which fear that their depositors will pay for bank failures in southern EU countries. .
