Also, the negative feedback loop between the fiscal problems of some EMU member countries and the risk exposures of significant financial institutions are prominent causes of the current maladies in that region, which are threatening to further affect the rest of the world.
The scheme would guarantee the same protection in all the countries participating in the SSM; it would increase confidence in the European banking system on a level playing field. The EDIS should be established in three stages. In the first one (reinsurance, until 2019) the DIF would cover up to 20 per cent of the financial requirement or the losses of national funds.