Share the article
twitter-iconcopy-link-iconprint-icon
share-icon

German savings banks model shows Europe the way forward

The concepts on which a European banking union is based are flawed. Basing this union on the principles upon which the German savings banks model is founded – a model that has remained stable in recent years of crisis – would be a more sensible option.
Share the article
twitter-iconcopy-link-iconprint-icon
share-icon
German savings banks model shows Europe the way forward

Europe finds itself in the midst of a debate on structural reform. Some of the contributions made during this debate would appear to be a knee-jerk reaction. This also applies to the idea of a so-called 'banking union', which was put forward recently. In my opinion, the test of such a comprehensive concept for Europe must also be whether it is compatible with the fundamental principles of European unification: subsidiarity, proportionality and unity in diversity. Abandoning these principles and leaving aside well-functioning decentralised structures would be too high a price to pay. In particular, it would be too high a price for the wrong objective – to bail out faltering banks abroad with the money of German savers.

In the opinion of the Savings Banks Finance Group [representing savings banks, landesbanken and regional building societies], the top priority must be to strengthen confidence, increase the stability of the European financial sector and to demand accountability from banks, specifically big banks. Last but not least, the questions relating to banking supervision, deposit protection schemes and crisis management options must also be addressed.

To continue reading, join our community and benefit from

  • In-depth coverage across key markets
  • Comments from financial leaders and policymakers worldwide
  • Regional/country bank rankings and awards
Activate your free trial