Management & Marketing no. 4/2014

The U.S. bank insurance and resolution experience and lessons for the European Union

Emmanuel N. ROUSSAKIS,
Florida International University, Miami, Unites States of America

Abstract. The viewpoint presents the bank insurance and resolution experience of the United States and the European Union in addressing the financial stability of their respective markets. It first describes the development of the U.S. Federal Deposit Insurance Corporation and its functions as shaped by law, technological advances and market forces. Then it describes the European Union experience through an overview of the major enactments that have shaped the corresponding framework. The recent establishment of Eurozone’s Single Supervisory Mechanism although short of a pan-European insurance fund offers the prospect of a complement structure to its counterpart across the Atlantic.

Keyword: Federal Deposit Insurance Corporation (FDIC), insured and uninsured depositors, bridge bank, recovery and resolution, bail-in, subprime mortgage crisis, sovereign debt, tier 1 capital, stress test.

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