And that’s why a European Deposit Insurance Scheme (EDIS) is also not the right institutional response in restoring the balance between liability and control in the euro area at the current point in time.
As long as actions taken at the national level, such as drafting insolvency laws, or very high stocks of government bonds on banks’ balance sheets can have a substantial impact on the health of financial institutions, the European Deposit Insurance Scheme would allow risks arising from national decisions to be shifted to the European level.