Esther de Lange MEP (EPP, Netherlands) has finished her report clarifying the European Parliament's position on the European Commission's proposal to bring in a European deposit insurance scheme (EDIS) below €100,000.
In its proposal, which was presented nearly a year ago (see EUROPE 11436), the Commission provides for EDIS to be phased in in three stages. Initially (2017-2020), a reinsurance system would cover only the losses that a national deposit guarantee scheme is unable to absorb. Then, secondly (2020-2024), a co-insurance mechanism would kick in from the first euro of losses suffered by a bank. Finally, from 2024 onwards, the mechanism would be fully pooled at the end of a phase-in stage.
On Thursday 3 November, de Lange told a small group of journalists that she shared the Commission's sense of urgency over the need to move the text forwards in the legislative process. "If you want to start (the work), it means you have to start in a different way from what the Commission has proposed, because you need political support and to be realistic", she said. She went on to say that she had gone for a "more cautious approach".
The approach she has adopted on the issue comprises not three but just two stages. She has kept in the reinsurance stage, focusing it more on liquidity support. The aim would then be to have cash available to provide a rapid response to crisis situations. All financing would have to be repaid. This "revamped" first stage (to run for five years from 1 January 2019) would also provide more time for the debate on risk reduction, de Lange adds.
Germany is particularly keen for such a debate, as it is reluctant to authorise its banking sector to absorb losses suffered by other eurozone banks.
The coverage of the system would be progressive (20% per year). The move to an insurance system with a gradually increasing level of losses would no longer be automatic.
The 'DIF', or deposit insurance fund, would be divided into two categories: an individual sub-fund based on risk, to be filled by each national deposit guarantee system, and a joint risk-based sub-fund, to be fed into by all of the national systems. If necessary, the individual sub-fund of the country requiring intervention will be used, then the joint sub-fund, then the other individual sub-funds of the other member states. Repayment would be in reverse priority order.
The rapporteur also reiterated her opposition to a system based on an inter-governmental approach, hence the importance of the European Parliament swiftly reaching the broadest possible consensus, so that the debate on this approach is not revisited.
The draft de Lange report will be discussed by the Parliament's committee on economic and monetary affairs next week, in hope of a plenary session vote early in 2017. "With such a highly sensitive dossier, it would not be wise to put one fixed date on it", she said. (Original version in French by Élodie Lamer)