Pearse Doherty (Donegal, Sinn Fein)
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243. To ask the Minister for Finance the progress that has been made on the European deposit insurance scheme; and if he will make a statement on the matter. [14837/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The European Deposit Insurance Scheme (EDIS), is considered to be the third pillar of the Banking Union. The creation of the Banking Union was a powerful response to the 2008 Financial Crisis. The first two pillars of the Banking Union, the Single Supervisory Mechanism and the Single Resolution Mechanism, have been put in place and subject to a number of reforms to improve their effectiveness.

A well functioning system of deposit insurance, organised at the European Level, has long been recognised as an important tool for protecting depositors, safeguarding market confidence and ensuring financial stability. In this regard, in December 2021, European Leaders mandated the Eurogroup in inclusive format to agree a workplan to complete the Banking Union.

As a first step, Eurogroup Finance Ministers have agreed that work on completing the Banking Union should first focus on strengthening the frameworks for national Deposit Guarantee Schemes and the common framework for bank crisis management.

In the June 2022 Eurogroup Meeting, Ministers invited the European Commission to bring forward legislative proposals for a reformed Crisis Management and Deposit Insurance (CMDI) framework during this legislative cycle. Publication of this proposal is expected in H1 2023, and it will ensure the banking sector fully contributes to Europe's economic resilience and sustainability.

The following broad elements have been agreed to underpin the CMDI framework:

- A clarified and harmonised public interest assessment.

- Broadened application of resolution tools in crisis management, including for smaller and medium-sized banks.

- Further harmonisation of the use of Deposit Guarantee Scheme funds in crisis management, including a harmonised least-cost test to govern the use of DGS funds in crisis management.

- Harmonisation of targeted features of national bank insolvency laws to ensure consistency with the principles of the European CMDI framework.

This CMDI framework will strengthen the operation of national Deposit Guarantee Schemes and will be an important step towards implementing a common European system of deposit insurance as well as completing the Banking Union.