Bundesbank's Buch Wants Reform Before Banking Union Third Pillar
- Euro-area deposit insurance part of step-by-step approach
- Liability and control of risks should be at the same level
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Europe’s nascent banking union will get its final pillar of joint deposit insurance only when governments take further steps to raise control of the financial system to the euro-area level, Bundesbank Vice President Claudia Buch said.
“There are some preconditions that you have to have in place before you go into full-fledged European deposit insurance,” Buch said in an interview with Bloomberg Television in Frankfurt on Thursday. “That’s basically because we’re currently still in the situation where national policies have an important impact on the riskiness of bank balance sheets. I think we deal with those issues first.”