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Published on Monday, November 18, 2019

The culmination of the banking union: a German proposal

Following the financial crisis that led to a European sovereign crisis in 2012, the European Commission developed a roadmap for the creation of the banking union, based on three key pillars: the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism (SRM) and the Deposit Guarantee Scheme (DGS).

Key points

  • Key points:
  • The German Ministry recently published a document in which it proposes moving forward with the banking union through the creation of a European Deposit Guarantee Fund (EDIS).
  • It is not exempt from the risk reduction measures in the European financial system (regarding non-performing loans and sovereign risk, among others), which reduce the likelihood of this mechanism being used.

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