The sovereign-bank nexus thus needs to be severed once and for all in order to pave the way for a single deposit guarantee scheme. Banking regulation lies at the heart of the problem. Up to 8 / 10  BIS central bankers' speeches  now, government bonds have been given preferential treatment over loans to the private sector and households.
On the grounds of prudence, this special treatment is not warranted and needs to be stopped. After all, the debt crisis clearly refuted the notion that government bonds are risk-free. It would therefore be a mistake to create a single deposit guarantee scheme without first ensuring that all the conditions are met.