Alfred Sant Supports European Deposit Insurance Scheme In Case Of EU Bank Failures
Labour MEP and former Prime Minister Alfred Sant has supported the ruge for a European deposit insurance scheme in case national banks fail.
The establishment of the European Deposit Insurance Scheme (EDIS) would guarantee depositors a full refund of their money in case their European bank fails.
The report was adopted with 372 votes in favour, 155 votes against, and 132 abstentions.
Sant backed the calls for the completion of a Banking Union at a plenary debate of the European Parliament.
Sant urged for the rapid implementation of EDIS to strengthen the commitment to a strong and durable European banking system.
The establishment of the Banking Union is considered an essential step in addressing the sovereign-bank nexus which refers to the linkages between the government and banks within the EU’s financial system. This poses serious risks because if one sector fails, it could take the other down with it.
The union would prevent the “doom loop” wherein financial issues in one sector could trickle into the other.
Sant agreed that such a union would bring several benefits like stability and lower costs for customers. Yet, he did state that the current resolution doesn’t account for the EU’s need to develop globally competitive banking units capable of competing with the US and other major banks.
This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The European Parliament is not responsible for any use that may be made of the information it contains.
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