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
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.