Implementing broader Banking Union remains a long term commitment
Banking union does not appear in the chapter even though it forms a major pillar
in efforts to make the EA more resilient.
At the most recent EcoFin meeting, the
German caretaker finance minister Peter Altmaier (CDU) adopted a more
conciliatory tone on the contentious issue of a common European deposit
insurance (EDIS) and did not rule out that the EU could decide on a (medium)
roadmap on implementing EDIS. However, he stressed that the German
position has not changed in substance and that a significant risk reduction
remains a precondition for an agreement.
Often quoted as criteria for assessing risks in the banking sector are the level of NPLs and sovereign concentration in
banks‘ balance sheets, a convergence of insolvency regimes and certain bail-in
buffer (MREL) for banks. It seems less likely that the would-be SPD finance
minister Olaf Scholz will embark on a significantly different course.