Banking Union Completion Debates — European Deposit Insurance Scheme (EDIS)

The European Deposit Insurance Scheme (EDIS) is the proposed third pillar of the EU Banking Union. The basic idea is simple: banking supervision and bank resolution have largely moved to European level, but deposit insurance remains mainly national. EDIS is intended to close that institutional gap by progressively sharing deposit-protection risks across participating Banking Union states.

As of 2026, EDIS has not become a fully operational, fully mutualised European deposit-guarantee system. The debate therefore concerns not only technical deposit protection, but also risk sharing, moral hazard, sovereign-bank links, bank insolvency, state aid and ultimately the degree of financial solidarity that euro-area states are prepared to accept.

1. The three-pillar Banking Union

The Banking Union emerged from the euro-area financial and sovereign-debt crises. Its architecture is usually described as:

Pillar I — Single Supervisory Mechanism (SSM)
The ECB directly supervises significant banking groups, while national competent authorities participate within the common supervisory system.

Pillar II — Single Resolution Mechanism (SRM)
The Single Resolution Board and national resolution authorities deal with failing banks under a common European framework.

Pillar III — European Deposit Insurance Scheme (EDIS)
The proposed common European layer of depositor protection.

The imbalance is immediately visible:

European supervision + European resolution + predominantly national deposit insurance.

EDIS seeks to complete this architecture.

2. Existing law: the Deposit Guarantee Schemes Directive

Before understanding EDIS, it is necessary to distinguish it from the existing system.

Directive 2014/49/EU — Deposit Guarantee Schemes Directive (DGSD) requires Member States to maintain deposit-guarantee arrangements.

The standard protection is generally:

€100,000 per eligible depositor per credit institution.

Suppose a person holds €85,000 in an eligible account at a failing bank. Subject to the Directive's conditions, that amount falls within the ordinary coverage ceiling.

If the balance is €150,000, ordinarily €100,000 receives standard DGS protection, although special protection can apply to certain temporary high balances.

The key point is that the coverage rule is European, while the schemes providing that protection remain predominantly national.

3. Spain's existing system

Spain's principal scheme is the:

Fondo de Garantía de Depósitos de Entidades de Crédito (FGD).

Spanish banks contribute to the national framework.

Consequently, Spanish depositors already enjoy protection under EU-harmonised and Spanish deposit-guarantee rules.

EDIS should therefore not be understood as creating deposit protection from nothing.

Instead, it seeks to move from:

harmonised national insurance

toward:

increasingly mutualised European insurance.