The Raiffeisen Association, the National Bank, and commercial banks have issued a joint warning about a potential weakening of the deposit insurance system. This concern comes from a decision made by the EU Parliament, led by rapporteur Othmar Karas (ÖVP), which allows national deposit insurance funds to be used for resolution cases at an EU level. Specifically, half of the funds from national deposit protection funds in Austria, totaling two billion euros, could be transferred to an EU pot accessible by a European resolution authority if necessary.
The National Bank acknowledges the need to be prepared for times of crisis but also emphasizes the importance of having a coherent overall concept that significantly improves financial market stability before any decisions are made. Willi Cernko, bank chairman in the Austrian Economic Chamber (WKÖ), shares this sentiment and raises concerns about the protection of depositors. He believes that allowing European resolution authorities access to these funds could undermine the goal of safeguarding depositors’ savings.
Johannes Rehulka, Secretary General of the Raiffeisen Association, echoes Cernko’s concerns and warns against conducting such broad experiments just before the EU elections. Maintaining financial market stability and preserving savers’ trust in functioning systems are paramount and should not be jeopardized without a clear necessity. The potential implications of these changes are significant and warrant careful consideration before any further action is taken.