Banken-Garantien
R. Göweil, Wiener Zeitung
July 13 2010

The EU wants to create a deposit insurance using bank money. It is worth recalling that at the end of 2008, bank customer savings were secured by the state. In Austria, traditionally a nation of savers, this means that banks are required to pay something like 3.5 – 4 billion euro towards a guarantee fund for deposits. The so-called small decentralised banks – savings banks and people's banks – already have a mutual support pact: they all answer for each other. When the smaller institutions fail, they are bought by the larger banks, and so the customer is protected. It is a good system, because obligations cost nothing and clients are protected. At any rate, as we have seen, the major institutions benefit from an implied state guarantee. Obligations on client bank deposits must therefore be considered with caution: when the large institutions collapse, the final guarantor is the state. On the other hand, an insurance covering all institutions within a country is to be considered a good idea. If this system were then harmonised at a European level, it would be better. Savings banks are right to say that in this way historical organisations will be lost, but the crisis has shown that such organisations can be an impediment. There is a tendency towards concentration, which is vital for banks and any other organisation to finance itself. There are no alternatives other than continuing to rely on the state as the last line of defence.