ISTANBUL – The European Commission adopted a proposal today to strengthen the bloc’s existing bank crisis management and deposit insurance framework, reported Anadolu.
Focusing on medium-sized and smaller banks, the proposal will enable authorities to organise the banking sector broadly.
“In particular, it will facilitate the use of industry-funded safety nets to shield depositors in banking crises, such as by transferring them from an ailing bank to a healthy one,” it said.
“Such use of safety nets must only be a complement to the banks’ internal loss absorption capacity, which remains the first line of defence.”
The objectives are preserving financial stability and protecting taxpayers’ money, shielding the real economy from the impact of bank failure, and better protection for depositors. – Bernama, April 19, 2023
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