A proposal, not a law in force

The European Deposit Insurance Scheme (EDIS) is a proposed, not an adopted, element of the Banking Union. It was tabled by the European Commission in 2015 as proposal COM/2015/586 and is intended to complete the union's third pillar alongside the existing Single Supervisory Mechanism and Single Resolution Mechanism. Negotiations between the Member States have never concluded, and as at the date of this entry EDIS has not been enacted. Depositor protection in participating states therefore continues to rest entirely on national deposit guarantee schemes, not on any European fund.

Because it is only a proposal, EDIS has no EUR-Lex citation as an in-force act. Any description of its mechanics is a description of what has been proposed and debated, not of applicable law.

What it would do

The idea behind EDIS is that deposit protection should be as European as supervision and resolution have become. Today, if a bank fails, its covered deposits — protected up to EUR 100,000 per depositor per bank under the current directive — are repaid by the deposit guarantee scheme of the bank's home Member State. That leaves the strength of a depositor's guarantee tied to the fiscal capacity of a single state, one of the links the Banking Union was designed to weaken.

EDIS would pool deposit insurance across participating states so that the guarantee no longer depends on the location of the bank. Successive versions of the proposal have envisaged a phased path, moving from reinsurance of national schemes towards greater mutualisation over time, with the common fund built from bank contributions. The design questions that have blocked agreement concern how far losses should be shared before national schemes are exhausted and how legacy risks in national banking systems should be treated.

Relationship to resolution

Deposit insurance and resolution are closely linked. Covered deposits are excluded from bail-in and are protected in resolution, and a deposit guarantee scheme may be required to contribute when covered deposits are transferred or otherwise safeguarded. A common European scheme would sit behind those covered deposits union-wide, reinforcing the credibility of resolution by making depositor protection uniform across borders. Its absence is the principal gap in the Banking Union's architecture.

There is no in-force legal basis to cite. EDIS exists as European Commission proposal COM/2015/586 of 2015 to amend the Single Resolution Mechanism Regulation. The applicable law today is the Deposit Guarantee Schemes Directive, Directive 2014/49/EU, which harmonises national schemes, sets the EUR 100,000 coverage level and defines covered deposits. This entry describes a legislative proposal and should be read as such.

Practical relevance for banks and investors

For depositors and analysts, the key fact is that EDIS is not yet real: protection remains national in both source and funding. For banks, the outcome of the debate would affect future contribution obligations and the comparative strength of deposit guarantees across the union. Until it is adopted, assessments of Banking Union resilience must treat the third pillar as missing.