ECB President Mario Draghi spoke at the Generation €uro Students’ Award today. He said that EU cannot solve its problem just at national levels. And, more integration will allow EU to face economic challengers more effectively. Draghi also sounded easy regarding recent escalation in trade tension between US and China. In his view, the impact of the tariffs “announced” is small. Nonetheless, this could still hurt investor confidence. And Draghi emphasized that while “the direct effects are not big… in the end the key issue is retaliation.”
Separately, ECB released a paper titled “Completing the Banking Union with a European Deposit Insurance Scheme: who is afraid of cross-subsidisation?” The paper noted that study results indicated that a ” fully-funded DIF (Deposit Insurance Fund) would be sufficient to cover payouts even in very severe crises – even more severe than the 2007-2009 global financial crisis.” And, “EDIS (European Deposit Insurance Scheme) would offer major benefits in terms of depositor protection while posing limited risks…since the probability and magnitude of interventions are likely to be low.”
