ECB Governing Council member Klaas Knot urged that risk must be reduced before the Eurozone banking union is shared more widely among member states. The measures under the union include bank deposit insurance scheme and streamlining liquidity provision for banks under resolution. Knot argued that “these elements all imply more public risk-sharing in (the European Monetary Union) as liability for bank failures in other countries is shared at the European level.” And he emphasized that ” risk-sharing should be preceded by sufficient risk-reduction.”
Separately, another Governing Council member Vitas Vasiliauskas reiterated the call for an “EU-wide banking union”. And he said that “allow for a centralized supervisory approach for all of the EU’s largest systemically important banks, regardless of host-country membership in the monetary union.” Also, he added that “we need to do a better job at convincing decision-makers in non-euro area countries to enter into the “close cooperation” regime (with the ECB).”
