Buch and Laboureix urge deposit insurance and resolution liquidity
Claudia Buch and Dominique Laboureix call for common European deposit insurance, freer intragroup funding and credible liquidity support in bank resolution. They argue that simpler banking rules must accompany deeper integration without weakening resilience.
Three gaps in banking union
European Central Bank (ECB) Supervisory Board Chair Claudia Buch and Single Resolution Board (SRB) Chair Dominique Laboureix propose three reforms.
Common European deposit insurance would reduce the link between depositor confidence and national banking systems and sovereigns.
Stronger legal safeguards, including credible intragroup support arrangements, would support cross-border capital and liquidity flows.
Domestic capital and liquidity waivers are available, but cross-border waivers cover only liquidity and are rarely used.
A credible liquidity backstop during and after resolution would help recapitalised banks maintain critical functions when funding needs exceed existing European resolution resources.
Simpler rules without weaker safeguards
The authors support the European Commission's banking competitiveness agenda but oppose weaker resilience, departures from international standards or blurred institutional mandates.
National rules fragment banking markets, restricting diversification and scale.
The ECB and SRB coordinate data requests and on-site inspection planning, collect weekly liquidity data through one platform and have shortened processing for own-funds reductions and early redemptions of minimum requirement for own funds and eligible liabilities (MREL) instruments.
Integration cannot wait
For Buch and Laboureix, simplification alone leaves much of the reform agenda's economic potential unrealised.
Common protections and credible crisis funding underpin their case for freer cross-border resource allocation.
They warn that weaker standards would compound fragmentation's costs.