1.4.1.2 Proposal for the EDIS as third pillar of the European Banking Union

It is envisaged that, as a third pillar, the European Banking Union will comprise a European Deposit Insurance Scheme (EDIS) for payouts to depositors and contributions to resolution of the banks and bank groups that fall in scope of the SSM. The Five Presidents' Report signals that, as the current set-up with national deposit guarantee schemes remains vulnerable to large local shocks, common deposit insurance would increase the resilience of the European Banking Union against future crises. This is currently still a future step, although the Commission published a proposal for a regulation on 24 November 2015 with the intention of creating a more European system, disconnected from the sovereign, so that financial stability is enhanced, citizens can be certain that the safety of their deposits does not depend on their geographical location, and sound banks are not penalised by their place of establishment.1 It is intended that the EDIS will be privately funded through ex ante risk-based fees paid by all the participating banks in the SSM. In 2017, the Commission stated that the EDIS will progressively evolve from a reinsurance scheme into a fully mutualised co-insurance scheme over a number of years.2 At the time of writing this dissertation, it is not envisaged that the EDIS will be put in place before 2020.3