ECB can accept limited deposit insurance scheme as first step: de Guindos

EU finance and economy ministers hold informal meeting in Berlin
FILE PHOTO: Vice-President of the European Central Bank (ECB) Luis de Guindos gives a statement during the second day of the Informal Meeting of EU Ministers for Economics and Financial Affairs in Berlin, Germany September 12, 2020. Odd Andersen/Pool via REUTERS

March 18, 2021

FRANKFURT (Reuters) – The European Central Bank can live with a limited version of a European Deposit Insurance Scheme as long as this compromise is considered temporary, ECB Vice President Luis de Guindos said on Thursday.

With political support lacking for full-fledged deposit insurance, European Union member are discussing a hybrid model, in which liquidity support would be provided to national schemes as a first step.

“In my view, this hybrid model could be a possible compromise way forward, as long as an EDIS with full risk-sharing, covering both liquidity needs and losses in the steady state, remains the end goal,” de Guindos said in a speech.

(Reporting by Balazs Koranyi)