Nagel: European deposit protection would have many advantages

Joachim Nagel, President of the German Bundesbank, has said he believes the introduction of a European Deposit Insurance Scheme (EDIS) could make the eurozone overall more resilient. It would relieve the burden on national insurance schemes in the event of a crisis, strengthen customers’ trust in banks and it would relieve the member states as a whole, he said in his speech at the German Banking Congress.  

Various concepts for EDIS possible

This would depend on the specific design of EDIS, he said. He believes a number of different concepts might be possible. “A hybrid model would have many advantages over a centralised, purely European model: Firstly, it would better ensure the autonomy of those in the relevant schemes and their respective security mechanisms. Secondly, direct responsibility would continue to remain at the national level. Ultimately, the individual states will continue to have influence over the health of their banks.”