IDEAS home Printed from https://ideas.repec.org/a/prg/jnlaop/v2017y2017i4id589p59-76.html
   My bibliography  Save this article

European Deposit Insurance and the Bank Resolution System: An Opportunity to Extend the Single Resolution Mechanism
[Evropský systém pojištění vkladů a řešení krizí bank: příležitost k rozšíření jednotného mechanismu pro řešení krizí]

Author

Listed:
  • Lukáš Marek

Abstract

The aim of this paper is to analyse the potential design and competences of a European Deposit Insurance System, which would extend the operation of the existing Single Resolution Mechanism. The analysis also builds on the design of the Federal Deposit Insurance Corporation (FDIC) operating in the US, which is endowed with both resolution and deposit insurance competences. I argue that the Single Resolution Fund (SRF) could be transformed into a Single Resolution and Deposit Insurance Fund (SRDIF) whose capacity would be increased to 1.8% of insured deposits. SRDIF resources would be available both for bank resolution and deposit pay-outs. The main elements of the financing arrangements for the SRDIF would include risk-weighted ex-ante contributions from the banking sector and a public backstop created through a transformed ESM. Given the legal constraints derived from the so-called Meroni ruling, the discretionary decision making of an institution managing the SRDIF would have to involve the Commission and the Council as is the case of the existing Single Resolution Board (SRB). In order to mitigate the adverse selection issue, mutualisation of resources in the SRDIF would have to be gradual over a transition period of six years until 2024. A sufficient reduction of risks across national banking sectors in the EU/Eurozone Member States would have to be achieved in the transition period.

Suggested Citation

  • Lukáš Marek, 2017. "European Deposit Insurance and the Bank Resolution System: An Opportunity to Extend the Single Resolution Mechanism [Evropský systém pojištění vkladů a řešení krizí bank: příležitost k rozšíření je," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2017(4), pages 59-76.
    • Handle: RePEc:prg:jnlaop:v:2017:y:2017:i:4:id:589:p:59-76
    DOI: 10.18267/j.aop.589
    as

    Download full text from publisher

    File URL: http://aop.vse.cz/doi/10.18267/j.aop.589.html
    Download Restriction: free of charge
    File URL: http://aop.vse.cz/doi/10.18267/j.aop.589.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.aop.589?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anonymous, 1958. "European Coal and Steel Community," International Organization, Cambridge University Press, vol. 12(2), pages 257-260, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maher, Imelda & Stefan, Oana, 2019. "Delegation of powers and the rule of law: Energy justice in EU energy regulation," Energy Policy, Elsevier, vol. 128(C), pages 84-93.
    2. Leibfried, Stephan, 1998. "Spins of (dis)integration: What might 'reformers' in Canada learn from the 'social dimension' of the European Union?," Working papers of the ZeS 06/1998, University of Bremen, Centre for Social Policy Research (ZeS).
    3. Diane Fromage & Mariolina Eliantonio & Kathryn Wright, 2022. "Soft law and multilevel cooperation as sources of (new) constitutional challenges in EU economic and monetary integration: introduction to the special issue," Journal of Banking Regulation, Palgrave Macmillan, vol. 23(1), pages 1-6, March.
    4. Mihaela Tomaziu-Todosia & Grigore Tinică, 2021. "The Determinants and the Evolution of the Health Policies in Cardiovascular Medicine in a Postmodern Vision," Postmodern Openings, Editura Lumen, Department of Economics, vol. 12(1), pages 169-184, March.
    5. Stephen Martin, 2005. "U.S. Antitrust and EU Competition Policy: Where has the Former Been, Where is the Latter Going?," Working Papers de Economia (Economics Working Papers) 27, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
    6. Хасянов Р. З., 2021. "Критерии (Условия) Передачи Государственных Полномочий Организациям: Опыт Зарубежных Стран," Вопросы государственного и муниципального управления // Public administration issues, НИУ ВШЭ, issue 3, pages 155-179.
    7. Gianni Lo Schiavo, 2022. "The Single Supervisory Mechanism (SSM) and the EU Anti-Money Laundering framework compared: governance, rules, challenges and opportunities," Journal of Banking Regulation, Palgrave Macmillan, vol. 23(1), pages 91-105, March.
    8. Gren, Jakub, 2018. "The Eurosystem and the Single Supervisory Mechanism: institutional continuity under constitutional constraints," Legal Working Paper Series 17, European Central Bank.
    9. Filipec Ondřej, 2018. "Agent–Principal Dilemma and the EU Chemical Management," TalTech Journal of European Studies, Sciendo, vol. 8(1), pages 154-175, June.

    More about this item

    Keywords

    European Deposit Insurance System; bank resolution; deposit insurance; Federal Deposit Insurance Corporation; moral hazard; adverse selection; free rider problem;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • K2 - Law and Economics - - Regulation and Business Law
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlaop:v:2017:y:2017:i:4:id:589:p:59-76. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.