Thursday, 5 July 2012

Questions (19)

Charlie McConalogue

Question:

16 Deputy Charlie McConalogue asked the Minister for Finance his views on a single deposit insurance scheme to cover all eurozone countries; and if he will make a statement on the matter. [32699/12]

View answer

Written answers (Question to Minister for Finance)

The proposal for a banking union was first mooted by Commission President Barroso on 23 May. It has developed considerably over the last number of weeks in the context of the ongoing eurozone crisis, culminating in the paper on Economic and Monetary Union considered at last week's European Council. One of the main proposals in the paper on Economic and Monetary Union relates to an integrated financial framework. It proposes that, building on the single rule book, an integrated financial framework should have two central elements: [a] single European banking supervision and [b] a common deposit insurance and resolution framework.

The European Commission will present proposals shortly for a European deposit insurance scheme which would introduce a European dimension to national deposit guarantee schemes for banks. This could strengthen the credibility of the existing arrangements and serve as an important assurance that eligible deposits of all credit institutions are sufficiently insured. However much depends on the actual detail of the proposals. Once proposals are brought forward they will be examined carefully and we will engage constructively in their consideration at European Council.

As the Deputy will be aware, the Euro area Summit Statement of 29 June affirmed the importance of breaking the vicious circle between banks and sovereigns and committed to further examining the situation of the Irish financial sector with a view to improving sustainability.