Video: Wednesday, 20 January 2016

To improve financial stability the EU now supervises the largest banks. It has also created more possibilities to save banks from falling over and disrupting the entire Eurozone. Still, our Banking Union is missing one thing to make it really integrated and stable, Dirk Schoenmaker argues. He is the new professor of Banking and Finance at Rotterdam School of management, Erasmus University (RSM). In this opinion piece Schoenmaker explains why we need to go ahead with the proposals for a European Deposit Insurance. This would guarantee that our savings would be safe in times of banking trouble, no matter where in Europe that bank would be.

The long view: "European Deposit Insurance necessary for economic stability"

“Banks came in big problems during the financial crisis. The challenge is to create a stable banking system for Europe. Businesses need a loan from a bank to do new investments. Consumers need a mortgage to buy a house. Good provision of provision of credit is very important for the economy.”

Consumers are happy to move their savings to other European banks, if they can trust them and the deposit insurance behind it.


“I worked at the Ministry of Finance and at the Central Bank in England. During this period I have learned two things. It is important to prevent banking problems emerging. If they happen anyway, then you need to organise cooperation between authorities in advance, because during a crisis authorities take a national, narrow view when they deal with cross-border banks.”

Game theory

“In my research I use models from the literature of game theory to study cooperation between parties. These models show very clearly that you need to organise cooperation in advance and you need to have a binding agreement.”

European Deposit Insurance

“Now we have a banking union. Banking supervision of cross-border banks is done by the European Central Bank, which takes an overall view and this creates a stable banking system. The last missing piece is a European Deposit Insurance. Consumers are happy to move their savings to other European banks, if they can trust them and the deposit insurance behind it. So European Deposit Insurance would complete the Banking Union.”

Prof. Dirk Schoenmaker

Professor of Banking and Finance

Rotterdam School of Management (RSM)

Profile picture of Professor Dirk Schoenmaker
Pile of books with vibrant bookmarks protruding from various pages, symbolizing in-depth research.
Header image for RSM Discovery, representing the research stories and articles section of the Rotterdam School of Management website.

RSM Discovery

RSM's Research stories in a fun and accessible format. Read the latest insights from the best researchers in the field of business. You can also subscribe to the newsletter to receive a bimonthly highlight with the most popular articles.
  • Subscribe to the newsletter

Want to learn more about this subject?

RSM offers Executive Education and Master programmes in various business areas for any stage of your career. For instance:

Last seats

Leading Change

3-day programme

Young woman posing in front of De Rotterdam, Rotterdam's iconic modern skyscraper.

Personal brand effectiveness

3-day programme

Elegant man posing in front of the Erasmus Bridge in Rotterdam

Corporate Responsibility

3-day programme

Elegant man holding a skyline of skyscrapers connected to a globe in his palm, symbolizing corporate responsibility.
Portrait of Erika Harriford-McLaren

Erika Harriford-McLaren

Corporate Communications & PR Manager

Danielle Baan

Science Communication and Media Officer

Erasmus University campus in autumn, showcasing its iconic red trees, viewed from across the campus pool.