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Mr Domrovskis does not underestimate the political, legal and technical complexity and sensitivity of these issues across the EU and their financial stability implications, so it will be essential to develop a consensus both in the European Parliament and with the Member States.
This briefing takes stock of where the Banking Union stands in terms of sovereign exposures, home bias and concentration risks, as well as international regulatory developments.
The 2018 EP Banking Union report and the 2016 Council roadmap conditioned the adoption of an EU Regulatory Treatment of Sovereign Exposures (RTSE) to international standards to be worked out by the Basel Committee. Absent international regulatory progress, this briefing presents ways to address sovereign risks under the existing supervisory and regulatory framework.
It also provides an insight into various options identified by the European Banking Authority (EBA), the Basel Committee, the European Stability Mechanism (ESM) and the European Systemic Risk Board (ESRB) that might be coupled with other developments, including on a European deposit insurance scheme (EDIS).
The issue is currently discussed in theEurogroup High Level Working Group on EDIS, expected to report back to the European Council by end 2019.
Full briefing on European Parliament
Full answer on European Parliament