The Review of the EU Bank Crisis Management and Deposit Insurance Framework

This article provides an overview of the European Union crisis management framework and its need for reform. Institutional Protection Schemes related models, a predominant European banking model with long successful history, need to be better reflected in the overall framework. Its upcoming review should leverage on the ongoing Capital Market Union project, raising synergies with both benefitting from each other. Local resolution regimes should be further harmonized, regulatory barriers removed, and cooperation improved. This would make cross-border investment more attractive in the European Union and (future) candidate countries which are to date not members of the Euro Area, for example in Central, Eastern, and Southeastern Europe. Targeted Capital Market Union regulation could encourage and facilitate the build-up of loss-absorbing capacity exposures of long-term institutional investors.