The Commission has published a set of papers on its proposals for a euro-area wide deposit insurance scheme (EDIS) for bank deposits and further measures to reduce remaining risks in the banking sector. The Commission proposes a Regulation that would:
- build on the existing set of national schemes for deposit protection, and gradually introduce a system that will be mandatory for euro-zone banks and optional for other Member States;
- first require a reinsurance approach (until 2020) that would allow national schemes to access the EDIS once they were exhausted (subject to safeguards and up to a certain level);
- follow this with a co-insurance approach, under which the EDIS would be available to contribute a share of the costs from the moment depositors require reimbursement;
- finish by increasing the share of risk the EDIS assumes to 100% so it fully insures national schemes by 2024 (to mirror the full phasing in of the Single Resolution Fund under the current Deposit Guarantee Schemes Directive); and
- introduce a new European Deposit Insurance Fund financed by bank contributions.
Alongside this there will be measures that will, for example:
- reduce national options and discretions;
- harmonise national schemes;
- implement all remaining elements of bank regulation including limiting leverage and implementing FSB recommendations on Total Loss Absorbing Capacity;
- create better convergence in insolvency laws; and
- take action against Member States that do not implement the Bank Recovery and Resolution Directive.