Date: 11th October 2017
On 11 October, Sven Giegold (member of the European Parliament’s ECON Committee) reacted to the European Commission’s (EC) communication on the completion of the Banking Union (BU) in a Post on his blog.
In particular, Giegold criticises the proposed interim steps to be taken in order to pass from the 1st to the 2nd phase of the European Deposit Insurance Scheme (EDIS): an Asset Quality Review (AQR) to be undertaken by central banks.
The German MEP describes this transitory procedure as letting ‘the fox guard the henhouse’, since the fulfilment of the proposed condition to initiate the second EDIS phase will be subject to an EC decision.
In addition, Giegold says that concrete proposals to reduce risks for European savers should be considered, such as:
– Banks should hold equity from European sovereigns;
– Higher leverage ratio should be required for financial institutions with a high-risk profile; or
– Internal bank models should have a limited risk underestimation.