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Austrian Banks View Savers Protection to be Endangered

Published: September 15, 2012; 19:54 · (FriedlNews)

The planned unification of the deposit protection is met with skepticism at Austrian banks. As the details are not clear yet, the deposit protection is yet no issue anyway.

Austrian Banks View Savers Protection to be Endangered / Picture: © Flickr

This week, the Commission of the EU has presented its proposal for establishing a banking union. According to the Commission, the banking union should contain a centralized supervision authority. Moreover, the deposit protection and the restructuring rules should be unified. As a first step, the competence of ECB will be enlarged. ECB becomes a centralized financial market authority for the big banks in the Eurozone.

Bank Austria´s CEO Willibald Cernko argued that it would be important to promote the fiscal union and to establish a deposit protection mechanism now. OenB´s (Austrian Central Bank) governor Ewald Nowotny explained that it would take some time until the deposit protection will be implemented. “For the time being, I would focus on a common supervision.” Many details would be not clear yet.

Anyway, the Commission did not present details on the planned deposit protection yet. The corresponding plans should be announced later. Commissioner Michel Barnier indicted that there will be no centralized deposit protection for the time being. After German banks offered fierce resistance, it seems that the Commission decided to postpone the implementation of the centralized deposit protection.

Also Austrian banks were highly skeptical. “It is not acceptable that Austrian savers should be responsible for Greek banks.” Michael Ikrath, Secretary General of the Austrian savings banks association, says. Ikrath thinks that the issue was presented too soon and refers to the resistance of Germany. “It seems that the deposit protection is no issue yet. “And this is just as well.”