G. Stournaras: No financial institution ought to go on the price of its personal mismanagement to the taxpayer – 2024-05-16 12:18:30

“A financial institution’s exit from the banking market needs to be carried out in an orderly method, not disrupting the availability of important features, not endangering the monetary stability of the banking system as a complete and stopping pointless impairment,” mentioned its governor. Financial institution of Greece Giannis Stournaras, talking right this moment on the “Banking Decision at Ten: Experiences and Open Points” convention

On the identical time he identified the necessity to advance the harmonization of nationwide deposit assure methods.

As he characteristically mentioned, “no financial institution needs to be allowed to go on the price of its personal mismanagement to the taxpayer simply because it’s thought of ‘too huge to fail.’

“Banks are safer however we should not relaxation”

Referring to the reform of the decision system that has taken place lately, he argued that via the efforts of the Single Decision Mechanism, banks within the Union have develop into extra resolvable and subsequently safer. “Not solely have they elevated their capability to soak up losses, however they’ve additionally developed their expertise in all points to contribute to the decision functionality. As well as, the Single Decision Fund has achieved its aim, because it has been totally financed and has mutualized the related funds” he characteristically identified.

“Nevertheless” as he warned “the above doesn’t imply that we must always relaxation”.

It’s recalled that three weeks in the past, on April 24, the European Parliament accomplished the primary studying of the proposed legislative texts on disaster administration and deposit insurance coverage. The texts adopted by the Parliament present its help for the overall course proposed by the Fee. The primary distinction pertains to his proposal to undertake two tiers versus a single tier for depositors within the classification of claims in particular liquidation.

Nevertheless, as Mr. Stournaras clarified, the Fee’s current proposals nonetheless don’t handle crucial lacking aspect of the European banking disaster administration framework. It’s in regards to the creation of the third pillar of the Banking Union, of the European Deposit Assure System (EDIS), which remains to be not supported by some Member States.