FRANKFURT (MNI) – A clear and time-bound commitment for a European
Banking Union including a joint deposit guarantee scheme is crucial,
European Central Bank Governing Council member Carlos Costa said
Wednesday.
“With all banks under unified supervision, bank deposits of euro
area citizens should also be guaranteed at the European level,” Costa
said. “This means that the banking union should include not only
integrated supervision but also shared mechanisms for deposit guarantee
and for bank resolution, thereby aligning supervisory and ‘safety net’
responsibilities.”
While there could be a transitional period during which the
responsibilities for reimbursements would lie with the national deposit
guarantee systems so as to avoid any moral hazards linked to the sharing
of legacy risks, eventually “full mutualisation of deposit guarantee and
resolution mechanism should be pursued,” Costa said.
“Without establishing these common mechanism the banking union will
stay incomplete and the de-linkage between banks and national sovereigns
will not be ensured,” Costa said. “As the setting up of the Single
Supervisory Mechanism is moving faster than the other two key elements,
it is crucial to establish a clear and time-bound road map.”
–Frankfurt newsroom, +49-69-720-142; jtreeck@mni-news.com
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