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Press, Journal Article

The essence of this argument was taken into account when financial regulation was

overhauled and the banking union established. By tightening capital requirements and

introducing a bail-in regime, the principle of liability is being more rigorously enforced in the

banking sector: the greater the volume of liable capital that shareholders and creditors have

available, the greater the losses that a bank is able to shoulder and the less likely a taxpayer

bail-out becomes.

The principle of liability also plays an important role in the discussion surrounding a

European deposit insurance scheme. It cannot be denied that a single deposit insurance

scheme could have a stabilising effect.

However, as long as actions at the national level, such as drafting insolvency law or

responding to very high stocks of government bonds on banks' balance sheets, can have a

substantial impact on the welfare of financial institutions, savers from other member states

should not be held jointly liable.

In this respect, I welcome the fact that the Economic and Financial Affairs Council will not

decide on the European deposit insurance scheme until adequate de-risking measures have

been taken. And it goes without saying that adequate measures also include regulatory steps

leading to the end of preferential treatment of government bonds over loans to the private

sector. In any case, risk-appropriate capital backing and limiting government bond

investments would significantly reduce the risk of recourse being made to the deposit

insurance scheme.

4 Conclusions from the Brexit vote

Ladies and gentlemen

I agree with the President of the European Parliament, who has called for "a more unified and

cohesive European Union".

But this should not come at the price of increased joint liability unless joint control rights at

the European level are agreed at the same time. And, in this case, we would have to make sure

that the decisions made at the European level are also conducive to stability.

However, many of the proposals put forward before the Brexit referendum and aimed at

"completing monetary union" only focus on elements of joint liability and disregard the issue

of joint decision-making. They obviously anticipate and accept member states' reluctance to

transfer national sovereignty to the community level.

Although such proposals might lower the centre of gravity of the monetary union, to stay with

Harold James' allegory, they would also shift it to one side, which would not enable the

monetary union to survive as a stability union in the long term.

Opinions on the future shape of the monetary union therefore differ greatly. However, even

where common rules have been agreed - in the area of fiscal policy, for instance, - they are

not taken seriously, and the Commission lets the major euro-area countries, in particular, do