Strengthening the EU bank crisis management and deposit insurance framework

The European Commission is reviewing the crisis management and deposit insurance framework (CMDI) in order to strengthen the second pillar of the banking Union. Based on the outcome of the review, the Commission may bring forward amending proposals in the 4th quarter of 2021 for consideration by the EU co-legislators.

The review focuses on three EU legislative texts: the Bank Recovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRMR), and the Deposit Guarantee Schemes Directive (DGSD). Based on the outcome of the review, the Commission may bring forward amending proposals in the fourth quarter of 2021 for consideration by the EU co-legislators.

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This high-level conference is an opportunity for interested parties to discuss the issues that emerged in the implementation of the existing framework and to debate possible policy solutions. Furthermore, the current health crisis has highlighted the need for a strengthened banking Union and the safety nets it offers – such as a European deposit insurance scheme (EDIS).

Strengthening the EU’s bank crisis management and deposit insurance framework: for a more resilient and efficient banking union

Online Event: 18/03/2021

Two keynote speakers will address the urgent need to complete the banking Union, including its 3rd – still missing – pillar EDIS. Policymakers, regulators and stakeholders will discuss their views in 3 panels:

• The resolution and insolvency toolbox
• Resolution and insolvency funding
• The way forward on deposit insurance

The European Commission has launched a targeted technical consultation as well as a general public consultation on the revision of the EU’s crisis management and deposit insurance framework. The results of these consultations will also feed into the Commission’s work to make this framework more coherent and robust.

Deposit insurance framework (CMDI)

Since the global financial crisis, the EU laid out the rules for handling bank failures and enhancing depositor protection. This public consultation is part of the overall consultation strategy for the review of the bank crisis management and deposit insurance framework. The consultation seeks to gather stakeholders’ experience with the current crisis management and deposit insurance framework as well as their views on the revision of the framework, which is part of the debate on the completion of the Banking Union and in particular its third and missing pillar EDIS.

What is deposit insurance?

A scheme to protect depositors against loss of their insured deposits in the event that a bank is unable to meet its obligations to its depositors.

The main objectives of a deposit insurance scheme (DIS) is …

• to insure the most vulnerable depositors (individuals, sometimes SMEs) and
• to contribute to financial stability (by preventing bank runs).

A deposit insurance scheme is part of the financial safety net, together with the central bank, the bank supervisor, the resolution authority and the MOF.

eudebates deposit insurance framework