Banking Union - Eurofi

Context

In response to the sovereign crisis, the EU created the Banking Union in 2012 to safeguard financial stability, deliver a safer banking sector and protect the taxpayer from the cost of bank failures. The Banking Union, currently covering the 19 Eurozone countries, is also open to other EU Member States and is based on three pillars.

The first pillar is the Single Supervisory mechanism (SSM), a new system of banking supervision comprising the ECB and the national authorities, directly supervising the 115 most significant banks of the euro area (holding almost 82% of assets). The second pillar is the Single Resolution Mechanism (SRM) in charge of the resolution of failing banks with minimal costs for taxpayers and to the real economy.

The funds used for resolution are provided by the Single Resolution Fund (SRF), financed by contributions from banks and guaranteed as a last resort by a Common Backstop provided by the ESM, following an agreement reached by the Member States. In case it is used the common backstop would be repaid by the banking sector. A single rulebook applies to these two first pillars.

The third pillar is the European deposit insurance scheme (EDIS) for bank deposits in the euro area proposed by the Commission in November 2015. Building on the system of national deposit guarantee schemes (DGS), this system already ensures that all deposits up to €100 000 are protected by DGSs all over the EU. Ultimately, these national DGSs are to be fully financed by EDIS.

Contributions to the policy debate

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)

Key Eurofi
documents

Eurofi policy notes

Improving the EU bank crisis management framework for small and medium sized banks and D-SIBs - February 2022 new

Banking fragmentation issues in the EU - September 2021

Improving the EU bank crisis management framework for small and medium sized banks of the SSM and the SRB - April 2021

The protection of deposits in the EU : Pros and Cons and a possible way forward - April 2020

Making the Banking Union effective : what priorities ? - September 2019

Medium sized bank resolution : challenges and tools - September 2019

Banking fragmentation issues in the EU - September 2019

Addressing ring-fencing issues in the Banking Union - April 2019

Optimising the Banking Union - September 2018

Session summaries

Addressing ring fencing practices in the Banking Union - Paris High Level Seminar - February 2022 new

EU banking crisis management framework: improvement priorities - Paris High Level Seminar - February 2022 new

Bank fragmentation and consolidation: are prospects improving in the EU? - Ljubljana Financial Forum - September 2021

Bank model diversity in the Banking Union context: benefits and challenges - Ljubljana Financial Forum - September 2021

Improving the EU bank crisis management framework - Lisbon Virtual Seminar - April 2021

Does the Covid-19 crisis reinforce the case for the Banking Union? - Berlin Financial Forum - September 2020

Making the Banking Union effective - Helsinki Financial Forum - September 2019

Medium-sized bank resolution - Helsinki Financial Forum - September 2019

Addressing ring-fencing issues in the Banking Union - Bucharest High Level Seminar - April 2019

Optimising the Banking Union - Vienna Financial Forum - September 2018

Resolution of banking groups at the EU Level - Vienna Financial Forum - September 2018

Public and private
sector views

Public authority views

Banking Union

M. Merlin - European Commission - Fostering market integration and completion of the Banking Union - September 2020

E. Wimmer - Federal Ministry of Finance, Germany - Never waste a good crisis - the Banking Union for a better recovery and lasting prosperity - September 2020

M. Ferber - European Parliament - A Banking Union for a stronger Europe - April 2020

R. Holzmann - Oesterreichische Nationalbank - What are the costs and risks of a delayed compared to a half-baked completion of the Banking Union? - April 2020

C. da Silva Costa - Banco de Portugal - Safeguarding financial stability at local level within the Banking Union - April 2020

V. Vasiliauskas - Bank of Lithuania - Completion of the Banking Union calls for a comprehensive approach - April 2020

I. Tinagli - European Parliament - The cost of not achieving the Banking Union - April 2020

Resolution framework

E. Fernandez-Bollo - European Central Bank (ECB) - The coronavirus pandemic and banking integration - September 2020

L. Garicano - European Parliament - Towards an innovative European solution to bad loans - September 2020

E. König - Single Resolution Board (SRB) - Paths towards a clear and predictable liquidation regime - September 2020

M. Drvar - Croatian National Bank - Material matters: parent institutions and home supervisors attention needed - April 2020

E. Fernandez-Bollo - European Central Bank (ECB) - Banking Union beyond home and host - April 2020

E. König - Single Resolution Board - A centralized administrative liquidation tool for banks - April 2020

M. Merlin - European Commission - Towards a more effective crisis management and completion of the Banking Union - April 2020

Bank resolution

H. Ettl - Austrian Financial Market Authority - Winding down smaller and mid-sized banks – A possible way forward - April 2021

M. Merlin - DG for Financial Stability, Financial Services and Capital Markets Union, European Commission - Evolution rather than revolution in crisis management and deposit insurance - April 2021

M. Velentza - DG Competition, European Commission - Developments in the state aid and banking crisis management framework - April 2021

E. König - Single Resolution Board (SRB) - A European solution to deal with failures of medium-sized banks in the Banking Union - April 2021

EDIS

P. Hernández de Cos - Banco de España - Common policies against common shocks - April 2020

J. Fernández - European Parliament - EDIS: completing the Banking Union - April 2020

Industry views

Banking Union

J. Beyssade - Groupe BPCE - We need to make the full use of the Banking Union as a single jurisdiction - April 2021

S. Fernández de Lis - Banco Bilbao Vizcaya Argentaria (BBVA) - Banking Union in times of Covid - September 2020

D. van Wassenaer - ING Group - Covid-19 reinforces the case for the completion of Banking Union - September 2020

Bank resolution

K-P. Schackmann - Fallis - Deutscher Sparkassen- und Giroverband (DSGV) - Improving the crisis management and deposit insurance framework while preserving the diversity of the EU banking system - April 2021

D. Van Wassenaer - ING Group - Improve the efficiency of the EU Crisis Management Framework: a key intermediate step in achieving Banking Union - April 2021

Dr. A. Dombret - Oliver Wyman - Much still needs be done! - April 2020

G. Edwards - S&P Global Ratings - Continued bank bail-outs stretch the credibility of Europe’s resolution intent - April 2020

D. Kos - CLS Bank International - Resolution regimes: There is progress, but more needs to be done - April 2020

M. Stolpe - Nordea - Trust in the Single Market - April 2020

M. Venus - BNP Paribas - Liquidity in Resolution: the case for constructive certainty - April 2020

EDIS

K.P. Schackmann-Fallis - Deutscher Sparkassen- und Giroverband (DSGV) - Shaping the Banking Union and allowing for diversity in the EU’s banking sector - September 2020

G. Huber - DSGV - Banking Union already established - April 2020