Deposit Guarantee Schemes and Bank Crises: Some Considerations on Proportionality

Martinez Cristiano
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Martinez Cristiano: Banca d’Italia, Legal Services Directorate.RomItaly

European Company and Financial Law Review, 2025, vol. 22, issue 3, 414-430

Abstract: Depositor protection as an element of financial stability is the public policy objective of deposit guarantee schemes (DGSs). To that end DGSs contribute to the management of bank crises. Any such intervention needs be measured through the lens of proportionality, whose assessment depends on a number of elements (objectives, mandates, insurance logic, institutional models, crisis management strategies and tools as well as the applicable legal framework). The practice of proportionality takes into account all those factors, but it also shows some space for improvement that the 2023 European Commission proposal for the reform of the EU crisis management and deposit insurance framework tries to fill in. Such an initiative confirms the need to favour a flexible and reliable use of DGS funds for crisis management purposes in order to fulfil the aforementioned public policy objective.

Date: 2025
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DOI: 10.1515/ecfr-2025-0016

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