Bank Resolution and Deposit Guarantee Scheme As the European Banking Union: With Reference to the US Federal Deposit Insurance Corporation

European Banking Union (EBU) has progressed since June 2012, when European Commission firstly published a plan for the construction of the EBU. As of 2017, Single Supervisory Mechanism (SSM) has marked three years and Single Resolution Mechanism (SRM) has started as a full-fledged system since January 2016. Even though, the last pillar of the EBU, in a nutshell, European Deposit Insurance Scheme (EDIS) is under construction, the EBU has progressed coping with a plenty of criticism. In other words, the requirements of the EBU are overwhelming the costs and burden of the single supervisory and regulatory legislation.

This paper studies the EBU through political economy and institutional analysis. We shed light on the development of the SRM and the prospect of the EDIS. The SRM hasn’t enough experienced yet, however, Single Resolution Board plays the key role for bank resolutions and even for harmonization of deposit guarantee schemes in the EU. As for the EDIS, we need to analyze the feasibility of the common deposit guarantee system from the original demanding after the Global Financial Crisis and the implication of deposit protection as the ex-ante crisis management.

Another aspect is the comparative analysis between the EDIS and Federal Deposit Insurance Corporation (FDIC) in the US. The FDIC has experienced plenty of banking crises and resolutions since the establishment in 1933. And the FDIC embraces both of resolution and deposit guarantee scheme. We need to research it through transatlantic viewpoints for global harmonization on bank resolutions and deposit guarantee schemes.