EBA Single Rulebook Q&A: First Update for July 2019

The initial EBA answer to the rejected question states that liabilities referred to under Article 28(1) of Delegated Regulation (EU) 2015/61 shall receive an outflow rate of 20% in accordance with that Article only where their entire amount is fully covered by a deposit guarantee scheme in accordance with Directive 94/19/EC or Directive 2014/49/EU or an equivalent deposit guarantee scheme in a third country. Where the liability exceeds the deposit guarantee limit, a 40% outflow rate shall apply to the entire amount of the liability. The rejected question had asked why is it necessary for the Liabilities referred to under Article 28(1) of Delegated Regulation (EU) 2015/61 to be in their entire amount fully covered by a deposit guarantee scheme to receive an outflow rate of 20%, if mentioned Liabilities are insured to be quickly and effortlessly returned to their depositors in the amount of deposit guarantee scheme limit if credit institution defaults, so depositors would not have to participate in a long-term bankruptcy proceedings for guaranteed amount. 

The overall objective of the Q&A tool is to ensure consistent and effective application of the new regulatory framework across the Single Market. Institutions, supervisors, and other stakeholders can use the Single Rulebook Q&A tool for submitting questions on Capital Requirements Directive IV (CRD IV), Capital Requirement Regulation (CRR), and the related technical standards that have been developed by EBA and adopted by EC.

Related Links

• Question on MREL
• Question on Deposit Guarantee Scheme

Keywords: Europe, EU, Banking, Single Rulebook, Q&A, CRR, CRD IV, MREL, Resolution, EBA