Artikel

European bank deposit insurance could cushion impact of corona-induced corporate insolvencies

The European banking union has so far lacked its third pillar: a joint insurance fund for bank savings deposits. As the present study shows, this could be a major disadvantage in dealing with the economic impact of the corona pandemic. A scenario in which a wave of corporate insolvencies leads to loan and deposit losses reaching six percent over a year would over- whelm Germany's national deposit insurance scheme. Even if the government were to step in and guarantee all deposits, a European deposit insurance scheme (EDIS) would be by far the better option. With EDIS in place, private consumption would fall by 20 percent less and lending by around ten percent less than if the government were to initiate a bailout, which would also significantly increase public debt. From a German perspective, a swift introduction of EDIS would greatly increase risk-sharing. However, it is important to develop an efficient EDIS funding mechanism in order to minimize the burden on banks. Precautions should also be taken to prevent banks from taking greater risks as a result of EDIS being implemented.

Sprache
Englisch

Erschienen in
Journal: DIW Weekly Report ; ISSN: 2568-7697 ; Volume: 10 ; Year: 2020 ; Issue: 32/33 ; Pages: 325-333 ; Berlin: Deutsches Institut für Wirtschaftsforschung (DIW)

Klassifikation
Wirtschaft
Policy Objectives; Policy Designs and Consistency; Policy Coordination
International Policy Coordination and Transmission
Macroeconomic Issues of Monetary Unions
Insurance; Insurance Companies; Actuarial Studies
Financial Institutions and Services: Government Policy and Regulation
Thema
banking union
deposit insurance
risk-sharing

Ereignis
Geistige Schöpfung
(wer)
Clemens, Marius
Gebauer, Stefan
König, Tobias
Ereignis
Veröffentlichung
(wer)
Deutsches Institut für Wirtschaftsforschung (DIW)
(wo)
Berlin
(wann)
2020

DOI
doi:10.18723/diw_dwr:2020-32-1
Handle
Letzte Aktualisierung
20.09.2024, 08:23 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Artikel

Beteiligte

  • Clemens, Marius
  • Gebauer, Stefan
  • König, Tobias
  • Deutsches Institut für Wirtschaftsforschung (DIW)

Entstanden

  • 2020

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