EU deposit guarantee plan won’t hike moral hazard, says SRB chief
But Laboureix warns risks to national safety nets will increase without a eurozone-wide scheme
Dominique Laboureix, chair of the Single Resolution Board (SRB), says European Union plans to allow greater deployment of industry-funded deposit guarantee schemes (DGSs) to thwart future banking crises will not increase moral hazard.
A long-running concern about crisis management regimes is that they can encourage financial institutions to take greater risk, on the assumption they have a public sector backing if they get into difficulties.
“It’s not about creating a moral hazard, we don’t say
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