EBA updated data on the Deposit Guarantee Schemes across EU. This data for 2019 relates to two key concepts in the Deposit Guarantee Schemes Directive or DGSD—namely, available financial means and covered deposits. The data show that the target level of 0.8% of covered deposits, to be attained by July 2024, had been achieved by 18 of the 37 Deposit Guarantee Schemes in EU. Additionally, the available financial means data, as of December 31, 2019, show that 28 out of a total of 37 Deposit Guarantee Schemes in EU member states had increased their funds since December 31, 2018.
The increase in funds for 28 out of the 37 Deposit Guarantee Schemes in EU member states, in general, stems from levies paid by the members of the Deposit Guarantee Schemes; these levies were raised to reach the target level of 0.8% of covered deposits set out in the Deposit Guarantee Schemes Directive and to be attained by July 2024. No significant changes to the available financial means occurred in six Deposit Guarantee Schemes, including three cases where the Deposit Guarantee Schemes already hold more than the minimum target level of 0.8% of covered deposits. The amount of available financial means decreased only for two Deposit Guarantee Schemes: in Latvia because of a significant payout to depositors in 2019 and in Norway where half of the Deposit Guarantee Scheme available financial means were transferred to a separate resolution fund. Finally, there is also one new Deposit Guarantee Scheme in Austria, which took over the protection of deposits previously provided by four separate schemes. Available financial means is the amount of funds raised by Deposit Guarantee Schemes from credit institutions to be used mainly to reimburse depositors in case of bank failures.
EBA publishes this data annually to enhance the transparency and public accountability of Deposit Guarantee Schemes across EU to the benefit of depositors, markets, policymakers, Deposit Guarantee Schemes, and member states. In recent years, the approach to funding a deposit guarantee in EU has been strengthened and further harmonized. Under this new funding model, banks pay a levy every year into a national Deposit Guarantee Scheme fund and that money remains available in case the Scheme needs it to protect depositors if a bank fails. Member states, especially those that previously did not have such a fund, are transitioning to the new funding model and significant progress has been made to date. In EU, all banks, as well as any credit institutions allowed to take deposits, authorized in a member state must be members of an official Deposit Guarantee Scheme.
Keywords: Europe, EU, Banking, DGSD, Deposit Guarantee Schemes, Deposit Guarantee Fund, Crisis Management Framework, Resolution Framework, EBA
Previous ArticleSARB Announces Activation of Loan Guarantee Scheme Amid COVID Crisis
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
The European Council published a draft Commission Delegated Regulation to amend the regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.
The Monetary Authority of Singapore (MAS) published amendments to Notice 635, which sets out requirements that a bank in Singapore has to comply with when granting an unsecured non-card credit facility to individuals.
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.