EU Deposit Protection & Banking Union Proposed

Brussels are apparently planning the below:

• EU deposit protection.
• EU banking union.
• Levies on financial transactions.

EU-Wide Deposit Protection:

Through the years, multiple posters here have asked, time and time again, about EU wide deposit protection. Currently deposit protection in the EU is on a country by country basis, not an EU basis, with supposed, but not actual, harmonisation of deposit protection levels. It is supposed to be 100,000 EUR per person per bank. In Ireland, for the 3 Irish banks, it is unlimited with the ELG.

I very much support EU wide deposit protection. My two cents on this ...

EU wide deposit protection will:

• Assist with Ireland exiting the government guarantee (ELG) with a credible replacement.
• Help prevent bank runs like those seen in Greece & Spain and in 2010 in Ireland.
• Help prevent people worrying about the security of their savings.
• Standardise deposit protection.

It needs to be implemented correctly. I hope the EU learn from the FDIC ...

• The FDIC protects 250,000 USD per person per bank. The EU needs to go for a similar level.
• The FDIC has an implicit credit line from the Fed. The EU Deposit Protection Scheme needs an implicit credit line or guarantee from the ECB for credibility sake.
• The FDIC helps allow bad banks fail while protecting depositors to the above threshold.
• It needs to be implemented with the condition that national government guarantees and government deposit schemes are left to expire.

EU banking union:

Again, this needs to be done right.

• There needs to be an abolition of the term "non resident" with the replacement of "EU resident". If the person, is an EU resident, then they should be able to open a bank account anywhere in the EU banking union.
• AML regulations need to have greater standardisation.
• If done correctly, it will open a world of competition to EU citizens. Currently, Irish residents have a choice of 5 banks for a current account. They could have a choice of 100's including EU wide internet-based alternatives. That would bring real competition, choice and lower costs.

My quick two cents are following.
1) I would oppose an EU bank guarantee on the basis that I oppose all government guarantees of bank deposits. It perverts risk taking with people's deposits and puts taxpayers on the line for private losses. The best solution is to scrap all bank guarantees. Bank runs and the threat of them are a very good thig as it forces banks to be more prudent.
2) The reason it is so difficult for people to open accounts in other EU countries is because of all the regulations already in place. If a banking union means less regulation then I am in favour of this, but anytime a government body does something by it invariably introduces new and more laws. You can't solve unintended consequences of one regulation by introducing another one.

Oh, and a 3rd cent on transaction taxes. I totally oppose these as well as the customer will ultimately pay for these. We do. It. We'd more taxation in the overtaxed EU.

The germans have shot this down. It wont happen until there is a full fiscal and political union i.e 5+ years down the line and hence not a solution to the current crisis.

Brussels come out with whatever they want but unless its backed by the Germans they are just blowing hot air for the benefits of the markets

It looks like the Germans are getting fed up of writing the check for the excesses of everyone else.

I don't like the guy, but this is an excellent performance from Nigel Farage in the EU parliament this week:
http://www.youtube.com/watch?v=TN_1mF-3JTI

He's bang on the money with that one!

I agree, don't like the guy but agree with quite a lot of his ideas. And his assessment of the Spanish bailout is spot on by using sarcasm to ridicule it.