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
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.