The Third Pillar of the Banking Union and Its Troubled Implementation

In Europe, the regulation on deposit insurance schemes dates back to 1994 (Dir 94/19/EC). This Directive only required a minimum level of harmonization between domestic deposit guarantee schemes in the EU. It was amended first in 2009 (Dir. 2009/14/EC). In the statement of the EU Commission in December 2012, a robust deposit insurance system was the third pillar of the Banking Union, but a Pan-EU Deposit Guarantee Scheme was excluded due to difficulties in reaching a political compromise. In 2014 a new Directive (Dir. 2014/49/EU) was approved which ensures a harmonized level of protection for depositors. In 2016, the Commission prepared a new proposal to set up a European Deposit Insurance Scheme (EDIS). Many policy-related obstacles make it difficult to approve the EC proposal. Moreover, we believe that to strengthen the resilience of the euro-area banking sector to financial crises, the European legislature should think about the proper role of the EDIS in the new legal framework for management of banking crises