Options for Reforming Deposit Protection Schemes in the EU PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Options for Reforming Deposit Protection Schemes in the EU PDF full book. Access full book title Options for Reforming Deposit Protection Schemes in the EU by Maria Gerhardt. Download full books in PDF and EPUB format.
Author: Maria Gerhardt
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 14
Get Book Here
Book Description
With the financial crisis, citizens suddenly realized that different levels and forms of depositor protection co-existed in the EU, whereas they had been told for almost 20 years that a single market was in place. Current deposit insurance arrangements in Europe need to be changed, as they match neither market integration nor consumer expectations. But deposit insurance cannot be considered in isolation; it is part of the broader financial safety net and the crisis resolution tools for banks. Confronted with the question of what action should be taken to draw the right lessons from the crisis, practically the only option is an EU-wide fund, but policy-makers are still hesitant. Any intermediate solution will maintain too many distortions and imperfections and will not provide a coherent response to current challenges. This policy brief reviews current policy discussions on deposit insurance in the EU. It looks at the role of deposit insurance as part of the (European) financial safety net and examines the Commission's recent proposal to amend the EU Directive on deposit guarantee schemes (DGS). The three options for a European DGS are assessed, followed by conclusions and recommendations.--Publisher description.
Author: Maria Gerhardt
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 14
Get Book Here
Book Description
With the financial crisis, citizens suddenly realized that different levels and forms of depositor protection co-existed in the EU, whereas they had been told for almost 20 years that a single market was in place. Current deposit insurance arrangements in Europe need to be changed, as they match neither market integration nor consumer expectations. But deposit insurance cannot be considered in isolation; it is part of the broader financial safety net and the crisis resolution tools for banks. Confronted with the question of what action should be taken to draw the right lessons from the crisis, practically the only option is an EU-wide fund, but policy-makers are still hesitant. Any intermediate solution will maintain too many distortions and imperfections and will not provide a coherent response to current challenges. This policy brief reviews current policy discussions on deposit insurance in the EU. It looks at the role of deposit insurance as part of the (European) financial safety net and examines the Commission's recent proposal to amend the EU Directive on deposit guarantee schemes (DGS). The three options for a European DGS are assessed, followed by conclusions and recommendations.--Publisher description.
Author:
Publisher:
ISBN: 9789279988752
Category :
Languages : en
Pages :
Get Book Here
Book Description
In the European Union, the Deposit Guarantee Schemes Directive adopted in 2014 sets out rules and procedures to ensure depositor protection and is a key step towards harmonisation of deposit insurance in the European Union. It contains 22 national options and discretions (NODs) which Member States may apply to reflect specific national circumstances. The purpose of this study is to assess the respective national implementations of the NODs, including their practical impact on depositor protection, and to propose policy recommendations regarding their possible treatment under a reviewed DGSD or the European Deposit Insurance Scheme, under the assumption that the latter would take the form of a full insurance scheme. The analysis of the NODs is based on extensive surveys and interviews with representatives of national deposit guarantee schemes and authorities, including national competent authorities, central banks, Ministries of Finance, and banks. Based on the above analysis of the NODs, this study proposes alternative approaches for 12 NODs and full harmonisation for 3 NODs. It also recommends that 2 NODs could be retained in their current form while 5 NODs could be eliminated.
Author:
Publisher:
ISBN: 9789276126058
Category :
Languages : en
Pages :
Get Book Here
Book Description
Deposit insurance protects deposits and discourages depositors from bank runs. The strength of a deposit guarantee scheme (DGS) is primarily determined by the relative strength of its member institutions (mostly banks), the level of available financial means and the guarantor. It follows the principle that banks, participating in a DGS, and not taxpayers, should pay for bank failures. In the European Union, deposit insurance has been harmonised over the past two decades. The current rules and procedures on depositor protection are set out in the Deposit Guarantee Schemes Directive (DGSD) adopted in 2014, which strengthened depositor protection by requiring faster pay-outs, more robust funding, including a minimum target level for ex ante risk-based contributions, and increased information disclosure. Deposit insurance is therefore organised at national level and guaranteed by national governments, which are required to contribute when the funds of national DGSs are insufficient. In November 2015, the Commission proposed to set up a European deposit insurance scheme (EDIS) for bank deposits in the euro area as the third pillar of the Banking Union. Negotiations on the EDIS proposal are still ongoing. The DGSD contains about 22 national options and discretions (NODs), which may be applied on the basis of national circumstances, and their relevance under EDIS was frequently addressed in the context of the negotiations on EDIS in the European Parliament and the Council. In this context, the purpose of the study is to provide an overview of the current use of NODs in the Member States and contribute to the discussion regarding their treatment under EDIS, by formulating policy recommendations, including in view of the impact on EDIS in terms of financial exposure and administrative burden.
Author: Armand Zorn
Publisher: GRIN Verlag
ISBN: 3656983933
Category : Law
Languages : en
Pages : 17
Get Book Here
Book Description
Essay from the year 2015 in the subject Law - Civil / Private, Trade, Anti Trust Law, Business Law, grade: A-, Johns Hopkins University (SAIS), course: European Financial Markets, language: English, abstract: The financial crisis has highlighted the importance of deposit protection and has brought this neglected topic to the core of the debate on financial stability (Zimmermann, 2013). Germany was hit harder than most experts and politicians expected. The federal government was forced to take unprecedented steps, including the nationalization of banks and providing an unlimited guarantee on savings deposits. These actions illustrated the necessity to reform the German deposit system, opening a controversial debate on both, the national and European level. Deposit protection schemes serve two main functions. First, they provide security to depositors and should help to prevent bank runs. Second, they should facilitate bank resolution, shielding depositors from losses. Together with financial regulation and supervision and lenders of last resort, deposit protection represents a key component of financial safety nets, which aim at reducing the occurrence of financial crises and limiting their effects if they do occur. Accordingly, deposit insurance schemes play an important role for individual market participants as well as for the entire economy. This paper examines the German deposit insurance system before, during, and after the financial crisis. It answers three main questions: First, what was the state of the deposit insurance system before the financial crisis? Second, how did the deposit schemes fared during the crisis? Third, what reforms have been introduced and what is the current state of the system?
Author: Jakub Kerlin
Publisher: Springer
ISBN: 3319541633
Category : Business & Economics
Languages : en
Pages : 361
Get Book Here
Book Description
This book examines the changing role of Deposit Guarantee Schemes (DGSs) as a financial safety net of the European Union, with specific emphasis on post-crisis reforms. The author identifies the institutional weaknesses of DGSs and analyses their functioning in post-crisis conditions. Readers discover the extent to which the participation of DGSs in bank resolution increases effectiveness, and whether such enhancement of the financial safety net allows for the liquidation of large financial institutions. Finally, the book identifies, categorises, and analyses possible forms of involvement of DGSs in the EU resolution, as well as the proposal of methods for the quantitative measurement of the preparedness of DGSs to participate in this process.
Author: Jennifer Payne
Publisher:
ISBN:
Category :
Languages : en
Pages : 19
Get Book Here
Book Description
It is now generally accepted that deposit protection schemes are an important part of a banking regime. The predominant purpose of such schemes within the EU is to prevent bank runs. The EU introduced a Directive requiring deposit protection schemes in all EEA member states in 1994. However, this regime contained a number of significant weaknesses. These deficiencies were clearly exposed by the financial crisis, leading to amendments to the regime in 2009 and again in 2014. This paper analyses the function of deposit protection schemes and considers the design of an effective scheme, before scrutinising the EU regime to determine whether it can be said to be fit for purpose. While the 2009 and 2014 amendments have introduced many positive changes, a number of concerns remain regarding the design of the EU scheme. In particular, cross-border issues do not appear to have been adequately tackled, and the EU deposit protection regime is not well integrated into the other elements of the banking union. While the recent reforms increase the level of EU harmonisation of deposit protection at member state level, they represent a missed opportunity in terms of implementing a pan-European solution to this issue.
Author: Harry Huizinga
Publisher:
ISBN: 9789284691470
Category :
Languages : en
Pages : 21
Get Book Here
Book Description
This paper documents the relevance of Institutional Protection Schemes (IPSs) in the European banking market, and it discusses some drawbacks of the current practice of recognizing some IPSs as a deposit guarantee scheme as well as possible options for regulatory reform.This document was provided by the Economic Governance Support Unit at the request of the ECON Committee.
Author: Joachim Eule
Publisher:
ISBN: 9789289952491
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
In this paper we show that allowing deposit guarantee schemes (DGSs) the option of supporting asset and liability transfers in the event of a bank's insolvency provides important economic benefits. However, only 11 EU Member States have so far included such "alternative measures" in their DGSs' toolkits. The number of Member States where alternative measures have been actively used is even more limited. Based on our findings, we argue that giving deposit guarantee schemes in the EU the option of using alternative measures would improve the efficiency and effectiveness of the EU banking crisis management framework. It would speed up the handling of smaller banks' failures while reducing upfront outlays and final costs for deposit guarantee schemes. It would improve the protection of deposits, thereby safeguarding depositor confidence and overall financial stability. It would also allow access to finance to be better preserved and enhance the level playing field for banks and depositors in the EU. We also argue that, apart from the availability of the option in law, the least cost test and the creditor hierarchy determine the de facto availability and potential magnitude of alternative measures. Currently, however, both the least cost test and the creditor hierarchy limit the possibility of supporting asset and liability transfers and may therefore need to be reformed in order for economically efficient results to be achieved.
Author: Maria João Rodrigues
Publisher: Routledge
ISBN: 1317032705
Category : Political Science
Languages : en
Pages : 292
Get Book Here
Book Description
Research on European governance is central to understanding both the process of European integration and its external influence as a laboratory for multilateralism. This volume focuses on the impact of the recent Eurozone crisis and its far-reaching implications for European governance both inside and outside the EU borders. Ideal for classroom use, this volume covers: I. European modes of governance: concepts, recent trends and international implications with chapters by Lefkofridi & Schmitter, Cini, Borrs and Radaelli. II. The transformation of European economic governance with contributions by Fabbrini, Stoffaës, Collignon, Eising, Rasch and Rozbicka. III. The transformation of European social policy governance with Goetschy, Hemerijck, de la Porte and Heins. IV. The international implications of the transformation of EU governance highlighted by Rodrigues, Xiarchogiannopoulou and Mügge.
Author: Lucia Alessi
Publisher:
ISBN: 9789279770739
Category :
Languages : en
Pages :
Get Book Here
Book Description
In November 2015, the European Commission adopted a legislative proposal to set up a European Deposit Insurance Scheme (EDIS), a single deposit insurance system for all bank deposits in the Banking Union. JRC was requested to quantitatively assess the effectiveness of introducing a single deposit insurance scheme and to compare it with other alternative options for the set-up of such insurance at European level. JRC compared national Deposit Guarantee Schemes and EDIS based on their respective ability to cover insured deposits in the face of a banking crisis. Analyses are based upon the results of the SYMBOL model simulation of banks' failures. Results show that the fully mutualised fund grants greater protection than the other two options, both in the short term and in the medium/long term, after the recovery procedure and the collection of ex-post extraordinary contributions. The comparison between the mandatory reinsurance and the mandatory lending schemes demonstrates that the former is more effective than the latter, provided that the central body be granted sufficient funds. The performance of the mandatory lending scheme strongly depends upon the amount of resources provided to the central body and the caps on its intervention.
