Appeal to the EP: German Banking Industry and European Partners Urge Caution on European Deposit Insurance

The German Banking Industry Committee (DK) together with the Austrian Economic Chambers and the French Banking Federation, has issued an appeal to the European Parliament. At the start of the new legislative term, the associations emphasize the need for a more cautious and deliberate approach regarding the proposed European Deposit Insurance Scheme (EDIS).

The DK and its European partners highlight that the circumstances have significantly changed since the European Commission introduced the EDIS proposal in 2015. In particular, national deposit insurance systems have successfully strengthened their resilience in recent years. As a result, the previously assumed urgency for a centralized European solution has notably diminished.

The national systems have demonstrated their ability to ensure deposit stability. A rushed implementation of EDIS could jeopardize this stability rather than enhance it, the partners emphasize in their appeal. Europe currently faces more pressing challenges, such as sluggish economic growth and the transition to a CO₂-neutral economy.

Another key point is the ongoing review of the Crisis Management and Deposit Insurance (CMDI) framework by the European Parliament and the Council. The outcome of this review will be crucial for the future of European crisis management and, consequently, for the necessity and design of EDIS. "Only after the completion of this review can we assess whether EDIS is necessary at all and in what form it should be introduced", says Ulrich Reuter, President of the German Savings Banks Association, who currently chairs the DK.

Therefore, the DK and its partners call for the decision on EDIS to be made only after the CMDI review has been completed. Pushing forward prematurely could result in significant discrepancies between the systems and have negative effects on the stability of regional markets in Europe. Moreover, it could undermine investor and depositor confidence in the EU.

"We appeal to the European Parliament to carefully consider these developments and take a step back to ensure that all decisions are in line with the broader strategic goals of the EU. This includes promoting the Capital Markets Union and strengthening Europe's competitiveness", emphasizes Reuter on behalf of the DK. When deepening the Banking Union, the focus should be on removing existing barriers to free capital and liquidity movement within the Eurozone, rather than expending energy on EDIS too early.