Ultimately, the incomplete set-up of the Banking Union and the full implementation of the resolution regime are a dangerous combination. One that calls for a comprehensive rethinking of the existing framework of safety nets 13 – especially when monetary and fiscal policy have limited room for manoeuvre.
The establishment of a fully-fledged EDIS continues to be very difficult politically, despite the fact that it is a necessary risk reduction instrument that reduces moral hazard 14, and should be recognised as such to build confidence and trust between Member States.