Luxembourg, 16/06/2016 (Agence Europe) - Esther de Lange (EPP, Netherlands), who is steering negotiations at the European Parliament on the European deposit insurance system (EDIS), takes the view that the “gradual and cautious” introduction of a regulatory framework, “be it at European or international level”, to tackle the exposure of banks to the sovereign debt “will be a key issue” towards the creation of a fully-fledged EDIS.
In her working document on the EDIS proposal, of which EUROPE has had sight, the MEP acknowledges the arguments in favour of a pooled deposit system. Counselling caution, she emphasises the more controversial elements of the proposal, such as the legal basis decided upon (Article 114 single market) and the fact that the Commission has carried out no initial impact assessment. Producing a full impact assessment is of “vital importance to ensure that no member state is (perceived to be) worse off compared to its starting point”, the MEP stresses, lining up with Germany and Finland on this point.
De Lange believes that overcoming the considerable differences of opinion expressed will therefore be a matter of timing, the conditional measures to reduce the financial risks to be adopted in parallel and the very nature of the architecture of the EDIS, the third pillar of banking union in the eurozone.
Firmly believing that the work on the sharing and reducing of financial risks in the banking sector must move forward in parallel, the rapporteur has taken on board all of the conditional measures already on the table (see EUROPE 11573 and EUROPE 11565): - the full application of the bank resolution (BRRD) and deposit guarantee (DGS) directives, the latter of which may be revised to scale down the national options; - the introduction of the TLAC standard of the G20 on eligible own funds requirements; - progress towards the establishment of a “framework to address the issue of non-performing loans”; - the need to create a “better regulatory framework, either at European or international level”, to tackle the issue of the sovereign risk.
As regards the timetable, de Lange feels that the Commission's suggestion of a timetable in three stages (reinsurance, co-insurance, full pooling) to end up with a fully pooled EDIS system by 2024 is “unlikely”, not least due to the time it will take to adopt and apply the conditional measures to reduce the financial risks (see EUROPE 11437). Among the options under consideration, the MEP refers to the possibility of applying a longer transitional reinsurance phase than anticipated. (Original version in French by Mathieu Bion)