Instead of harmonizing the deposit protection funds of the European member states, the European Commission aims at creating a European Deposit Insurance Scheme on a European level. This is precisely where Siekmann’s criticism sets in. “Whether such an insurance can serve its purpose depends crucially on the financial means that are necessary”, Siekmann warns. In his opinion, the target level of the fund has been estimated too low. Even if further shortcomings in the design as the determination of amounts and the calculation of default probabilities were fixed, Siekmann remains skeptical as to whether premium differences among banks of various EU member states could be implemented. In his view, also the question of a guarantee by a solvent public authority remains open in the current draft, which is the key issue for the confidence of the population.
IMFS Working Paper 106
"Die Konstruktionsfehler der EU-Einlagensicherung"
(PDF, 155 KB)