The European Commission presented its proposals for European deposit insurance in late November 2015. Officials hope to stabilise the banking system and decouple banks’ financing costs from the solvency of their host states. This would achieve the original aim of the eurozone banking union: to break the link between states and their banking systems.
Under these proposals, the cost of bank rescues and deposit insurance would no longer be borne exclusively by individual countries, but by the eurozone as a whole. This would be a momentous step, which can only be successful if both the fine details and the whole structure have been carefully considered. German critics have called the proposal an “attack on German savings”, but in the end this move is vital if we want to build a sensible and successful banking union.
