The optimism after the corona pandemic should be used to make progress for Europe's banking union - also for a European deposit insurance.
EU Commissioner Mairead McGuinness called for this on Thursday at a conference on banking union organized by the law firm Freshfields Bruckhaus Deringer, the Frankfurt Institute for Law and Finance and the Center for Financial Studies.
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"It is critical that the discussion continues with the aim of reaching an agreement before the end of the year," said McGuinness.
It is a big step: In January the EU Commission started consultations to review the EU legal framework for crisis management and bank deposit insurance - by the end of the year it wants to publish a legislative proposal that is expected to include a European deposit guarantee system .
Prepare banks for the next crisis
The EU Commissioner emphasized that Europe's banks had come through the Corona crisis relatively robustly, and that the system now needs to be strengthened as protection against future crises.
“Never waste a good crisis”, demanded the EU Commissioner.
A crisis always offers an opportunity for fundamental changes: After the banking crisis, Europe had to take action and reduced its dependence on banks and states through a better resolution regime for banks.
But now the next step must also follow: "The banking union will only be complete when the deposit guarantee is in place."
The largest banks and banking groups in the euro area have been centrally supervised by the European Central Bank since 2014.
Even in the event that institutions in Europe have to be wound up due to an imbalance, there are now common rules.
There is a dispute about the joint Edis deposit protection scheme ("European deposit insurance scheme"), ie the cross-border protection of savings.
Germany is first calling for the risks in the balance sheets of European banks to be reduced.
Much is different after the pandemic
The topic of the “financial system after the pandemic” was examined from very different perspectives at the conference. After working from home, you have to get used to a lot again, said Freshfields partner Alexander Glos: "The pandemic had many effects on all of us." With a wink, he added that he had to look the morning before the physically held conference again how he ties his tie - because he has not done it in a long time.
The European Central Bank wants to set new priorities after the pandemic.
Frank Elderson from the ECB's board of directors announced that the central bank would also take climate risks more into account in banking supervision.
There is an “ambitious plan of action” for this: After a recently completed “top down” climate stress test, ie broken down from the macro perspective on the banks, a “bottom up” climate stress test should follow next year - one that deals more closely with climate risks individual banks.
The central bank will also subject its own balance sheet to such a test.
The ECB manager also signaled that banking supervision in Europe would not stand in the way of consolidation in the industry - not least, strong and profitable banks are needed for all of these projects.
Stefan Ermisch, the head of Hamburg Commercial Bank, emphasized that the example of the former Landesbank he led shows that banks can also be made more profitable in Germany - by concentrating on niches.
He still hopes that his privatized Landesbank will be included in the protection scheme of the Federal Association of German Banks, but he is "very optimistic".
Nevertheless, Germany is “overbanked”, said Ermisch: The financial system after the pandemic needs consolidation.