Institutional protection schemes link banks within a financial network or group and allow a member bank in difficulty to receive financial support from the scheme’s other members. Member banks enjoy unique benefits under EU law, including more lenient capital requirements.
Europe’s two largest institutional protection schemes are in Germany—the Sparkassen-Finanzgruppe of savings banks and the Cooperative Financial Group. Both have a major influence over EU banking policy debates and have opposed proposals to create a European deposit insurance scheme over fears it would undermine their own support system. This episode will examine the sticking points in ongoing reform discussions and the related policy trade-offs.
Senior Fellow, Peterson Institute for International Economics (PIIE)
About This Series
Financial Statements is a biweekly virtual event series hosted by Nicolas Véron that explores changes in the world of finance, encompassing themes of financial services regulation, corporate finance and governance, systemic fragility and crises, and structural changes driving business and policy trends in the financial sector.