This element, whatever its terms, will be of great important for the achievement of one goal of the banking union project, namely to mitigate the negative feedback loop between banks and sovereigns. Finally, the fifth element of the Banking Union will be the establishment of a common system of deposit protection.
A first step in this direction will be the adoption of the legislative proposal on deposit guarantee schemes, providing a harmonised framework. This framework should ensure depositor confidence and enable the national deposit guarantee  2  BIS central bankers’ speeches  schemes, built on common EU standards, to interact with the SRM.