Commercial banks, the Raiffeisen Association and the National Bank have issued a joint warning about the potential weakening of deposit insurance systems due to a decision made by EU Parliament, led by rapporteur Othmar Karas (ÖVP). Specifically, half of national deposit protection funds in Austria, amounting to two billion euros, could be transferred to an EU pot accessible by a European resolution authority if necessary.

The Raiffeisen Association emphasizes the need for a coherent overall concept that improves financial market stability before any decisions are made. Johannes Rehulka, Secretary General of the Raiffeisen Association shares similar concerns and warns against conducting broad experiments just before EU elections. He believes maintaining financial market stability and preserving savers’ trust in functioning systems is paramount and should not be jeopardized without clear necessity.

The National Bank acknowledges the importance of being prepared for times of crisis but also emphasizes that it is crucial to have a clear plan in place before making any decisions. Willi Cernko, bank chairman in the Austrian Economic Chamber (WKÖ) shares these concerns and believes allowing European resolution authorities access to national deposit protection funds could undermine depositors’ savings goals. The potential implications of these changes are significant and warrant careful consideration before any further action is taken.