Featured Product

    EBA Publishes Opinion on Improvement of Deposit Guarantee Directive

    February 11, 2020

    EBA published its third and final opinion, addressed to EC, on implementation of the Deposit Guarantee Schemes Directive (DGSD) in EU. The opinion focuses on deposit guarantee scheme (DGS) funding and uses of DGS funds and proposes a number of changes to the EU legal framework for DGSD. EBA invites EC to consider the proposals outlined in the opinions when preparing a report on the implementation of DGSD, for submission to the European Parliament and the Council. EBA also published a factsheet on improving depositor protection in EU.

    In its opinion, EBA assesses 33 topics related to DGS funding and uses of DGS funds, setting out 23 proposals for improving the legal framework for DGSD in EU. EBA calls for a clarification on what funds should count toward the available financial means (that is, ex-ante funds) of DGS and a clarification about when different DGS funding sources (including loans) can be used and under what conditions. The opinion also addresses the need to introduce more transparency in relation to the reporting of DGS funds, more consistency in the approach to payment commitments, and more precision in the DGSD in relation to how DGS funds should be invested.

    In addition, the opinion recommends the need for EC to further consider the consequences of the recent General Court ruling in the Tercas case, concerning the use of DGS funds to prevent failure of credit institutions and the ceiling up to which DGS funds can be used for such failure prevention. EC should also consider introducing, in the EU framework, the possibility to use assets of a failed institution to repay depositors. However, no changes have been proposed to the current DGSD provisions in relation to the minimum target level for the ex-ante funds, the target level basis, and the possibility for DGSs to continue collecting contributions above the minimum target level. The opinion also recommends that there is no need for changes in relation to contributions from third-country branches or for immediate changes to the risk-based contributions based on the assessment of their impact on different business models.

    Article 19(6) of the DGSD requires EBA to support EC in its development of a report on the progress toward implementation of the DGSD. The opinion on DGS funding and uses of DGS funds is the third part of the fulfillment of this mandate by EBA. This opinion follows the first opinion on eligibility of deposits, coverage level, and cooperation between DGSs (published in August 2019) and the second opinion on DGS payouts (published in October 2019).

     

    Related Links

    Keywords: Europe, EU, Banking, Deposit Guarantee Schemes, DGSD, Opinion, Deposit Guarantee Fund, Resolution Framework, EC, EBA

    Featured Experts
    Related Articles
    News

    APRA Penalizes Heritage Bank for Incorrect Reporting of Capital

    The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Releases Annual Report 2021-2022

    The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.

    November 29, 2021 WebPage Regulatory News
    News

    APRA Finalizes Capital Adequacy Standards for Banks

    The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.

    November 29, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.

    November 29, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance on Management of Climate Change Risks

    The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.

    November 26, 2021 WebPage Regulatory News
    News

    EBA Publishes Single Rulebook Q&A Updates in November 2021

    The European Banking Authority (EBA) Single Rulebook Question and Answer (Q&A) tool updates for this month include answers to 10 questions.

    November 26, 2021 WebPage Regulatory News
    News

    EC Finalizes Rules on Internal Approaches Benchmarking Exercise

    The European Commission, or EC, finalized the Implementing Regulation 2021/2017 with respect to the benchmark portfolios, reporting templates, and reporting instructions for the supervisory benchmarking of internal approaches for calculating own funds requirements.

    November 26, 2021 WebPage Regulatory News
    News

    EC Proposes New Measures Under Capital Markets Union Package

    The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.

    November 25, 2021 WebPage Regulatory News
    News

    European Council Adopts Position on Digital Finance Package Proposals

    The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).

    November 25, 2021 WebPage Regulatory News
    News

    PRA Proposes Rulebook Changes; BoE Extends BEEDS Testing Window

    The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.

    November 25, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7740