EBA Proposes Guidelines to Clarify Certain Aspects of DGSD
EBA proposed guidelines on the delineation and reporting of available financial means of the Deposit Guarantee Schemes or DGSs, with the consultation period ending on July 28, 2021. The guidelines propose to clarify that only funds that credit institutions contributed or that stem indirectly from such contributions, such as recoveries or investment income, will count toward reaching the target level of the Deposit Guarantee Scheme fund. The proposed guidelines extend the reporting requirements from Deposit Guarantee Schemes to EBA, with Annex 1 to the consultation paper presenting the reporting template for Deposit Guarantee Scheme funds.
An earlier EBA Opinion, which was published in January 2020, recommended clarifying, with respect to the Deposit Guarantee Scheme Directive (DGSD or Directive 2014/49/EU), that borrowed funds or funds stemming from borrowed funds should not count toward reaching the minimum target level for Deposit Guarantee Scheme funds. Given that a review of the Deposit Guarantee Scheme Directive (DGSD) is still several years away from being proposed, negotiated, and finalized, the proposed guidelines provide such a clarification ahead of any such changes, using the existing Directive as a legal basis. The draft guidelines clarify that Available Financial Means comprise:
- Qualified Available Financial Means—Funds stemming directly or indirectly from contributions of Deposit Guarantee Scheme member institutions, which qualify toward reaching the target level of the Deposit Guarantee Scheme fund
- Other Available Financial Means—Funds that are not qualified as available financial means, including borrowed funds that stem from liabilities such as loans, and hence do not count toward reaching the target level of the Deposit Guarantee Scheme fund.
The proposed guidelines will extend the reporting requirements from Deposit Guarantee Schemes to EBA to reflect the clarified concepts of Available Financial Means, Qualified Available Financial Means, and other Available Financial Means in the guidelines. They also require the reporting on outstanding liabilities of Deposit Guarantee Schemes, unclaimed repayments, and high-level information on alternative funding arrangements that are in place. That information would be published on the EBA website annually and should provide more transparency and comparability of the financial position of Deposit Guarantee Schemes across EU.
Related Links
Comment Due Date: July 28, 2021
Keywords: Europe, EU, Banking, Deposit Guarantee Scheme, Available Financial Means, DGSD, DGS, Reporting, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Related Articles
EC Regulation Sets Out Standards for Reporting and Disclosure of MREL
EC published the Implementing Regulation 2021/763 that lays down implementing technical standards for supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities (MREL).
APRA Decides to Standardize Submission Date for Quarterly Reporting
APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.
ECB Working Group Publishes Recommendations on EURIBOR Fallbacks
The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).
Bundesbank Publishes Supporting Documentation for Reporting by Banks
Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.
EBA Publishes Phase 1 of Reporting Framework 3.1
EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).
APRA to Finalize Capital Adequacy Standard Revisions by January 2022
Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA
ESMA Issues Guidelines on Outsourcing to Cloud Service Providers
ESMA published the final guidelines on outsourcing to cloud service providers.
EBA Publishes Data on Deposit Guarantee Schemes
EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.
OSFI Sets Out Plan for Future Guidance on Managing Technology Risk
OSFI has set out the schedule for release of draft guidance on the management of technology risks by federally regulated financial institutions and private pension plans.
MAS Updates Housing Loan Rules, Proposes Corporate Governance Guidance
MAS updated rules for new housing loans by banks and finance companies.
