International > The Banking Union and the third pillar

The Banking Union and the third pillar

The Banking Union and the third pillar are key issues for banking sector regulation in the euro area. The creation of the Banking Union has ushered in a single regulatory framework and strengthened financial stability through crisis management mechanisms.

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The Banking Union was set up with the aim of ensuring that the Euro Area banking industry is safe, sound, uniformly regulated and supervised under a Single Rulebook. This has the notable effect of improving financial stability by promoting the use of effective crisis management mechanisms to minimise the cost to taxpayers, who had previously borne the cost in former crisis.

The Banking Union currently features the Single Supervisory Mechanism (SSM), which was launched in 2014, and a Single Resolution Mechanism (SRM), which was activated a year later, plus a mutualised Single Resolution Fund (SRF), which is funded by all Eurosystem credit institutions, including Spanish entities, and can be called upon to address the resolution of institutions with a positive public interest assessment.

The European regulatory framework governing national deposit guarantee schemes belonging to the EU, as created in 2014, provides harmonised depositor protection across the EU. However a single European Deposit Insurance Scheme (EDIS) —the so-called third pillar of the Banking Union— has yet to be implemented and is still under political debate.

Establishing the EDIS would mean a further step in creating a single banking market, strengthening the Banking Union project and, not least, provide further protection for depositors in the event of a financial crisis. The FGD keeps a close eye on this ongoing debate and plays an active role in various forums on the subject, in coordination with other Spanish public authorities.


The FGD in the EU and other international organisations


The FGD in international guarantee fund associations


Cross-border cooperation with other funds

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