Brussels, |
|
Banking Union
In response to the 2008 financial crisis, EU is establishing a unified rulebook for financial players across the EU's 27 countries. This rulebook includes heightened prudential standards for banks, enhanced depositor protection, and mechanisms for managing failing banks. This foundation laid the groundwork for the Banking Union.
Given the evolving financial crisis into the euro area debt crisis, deeper integration of the banking system became crucial for the interconnected euro area countries. This led to the establishment of a Single Supervisory Mechanism (SSM) and a Single Resolution Mechanism (SRM) for banks in the banking union. While the first two pillars of the banking union, SSM and SRM, are fully operational, the third pillar, the European Deposit Insurance Scheme (EDIS) or Crisis Management and Deposit Insurance (CMDI) , is yet to be implemented.
Despite the progress, the EDIS legislative process has been delayed for over seven years. In April 2023, the European Commission proposed strengthening the EU bank crisis management and deposit insurance framework, with a focus on smaller banks, to enhance the SRM and advance the banking union's completion. The Commission's second single supervisory mechanism report also affirmed the SSM's success and effectiveness.
Given the evolving financial crisis into the euro area debt crisis, deeper integration of the banking system became crucial for the interconnected euro area countries. This led to the establishment of a Single Supervisory Mechanism (SSM) and a Single Resolution Mechanism (SRM) for banks in the banking union. While the first two pillars of the banking union, SSM and SRM, are fully operational, the third pillar, the European Deposit Insurance Scheme (EDIS) or Crisis Management and Deposit Insurance (CMDI) , is yet to be implemented.
Despite the progress, the EDIS legislative process has been delayed for over seven years. In April 2023, the European Commission proposed strengthening the EU bank crisis management and deposit insurance framework, with a focus on smaller banks, to enhance the SRM and advance the banking union's completion. The Commission's second single supervisory mechanism report also affirmed the SSM's success and effectiveness.