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Sant backs call for European deposit insurance scheme in case of banking failure
Sant called for the swift introduction of EDIS to reinforce the commitment to a robust and resilient European banking system
6 February 2024, 10:54am
Matthew Vella
Matthew Vella
2 min read
Alfred Sant
Former Labour prime minister Alfred Sant said the urgent establishment of the European Deposit Insurance Scheme (EDIS) would guarantee depositors a full refund of their money should a European bank they deposit their money in, fail.
In his intervention on the Banking Union annual report for 2023 at a plenary debate of the European Parliament, Labour MEP Alfred Sant concurred with the calls for the completion of the banking union.
The report was adopted with 372 votes in favour, 155 votes against and 132 abstentions. Alfred Sant voted in favour.
Sant called for the swift introduction of EDIS to reinforce the commitment to a robust and resilient European banking system.
“A case in point is the treatment regarding the roll-back of the sovereign debt-bank nexus. Correct as the approach is overall, its application to small-scale, peripheral members of the European Union could prove toxic,” he warned, highlighting the insufficient leeway for the flexible implementation of banking policies on a European basis.
Sovereign debt-bank nexus refers to the interconnectedness and potential risks between sovereign government and banks within the European Union’s financial system.
The completion of the Banking Union is seen as a crucial step to address the sovereign-bank nexus and prevent a “doom-loop”, where financial troubles in one sector could negatively impact the other. This will enhance financial stability and reduce the risk of taxpayer funded bailouts.
Sant agreed with the multifaceted benefits that a fully developed banking union would bring including stability and lower costs for customers. However, he stressed that the report does not take into account the need for the EU to develop globally competitive banking units able to compete with US major banks and other bank behemoths.
“A question that still needs to be answered is whether the absorption by larger conglomerates of most of Europe’s smaller banks is acceptable,” Sant said.
This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The action was co-financed by the European Union in the frame of the European Parliament's grant programme in the field of communication. The European Parliament was not involved in its preparation and is, in no case, responsible for or bound by the information or opinions expressed in the context of this action. In accordance with applicable law, the authors, interviewed people, publishers or programme broadcasters are solely responsible. The European Parliament can also not be held liable for direct or indirect damage that may result from the implementation of the action.
Matthew Vella, a freelance journalist at MaltaToday, was formerly executive editor at Malt...
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