EBA Recommends Depositor Protection in the Event of No-Deal Brexit
EBA published an opinion on the deposit protection issues stemming from the withdrawal of the UK from the EU. The opinion is addressed to the Deposit Guarantee Schemes Designated Authorities (DGSDAs) and is intended to ensure that depositors in the branches of the UK credit institutions in the EU are adequately protected by the EU deposit guarantee schemes (DGSs), in case of a no-deal Brexit.
No-deal Brexit may affect branches of UK credit institutions in EU, depending on the post-Brexit decisions taken by the UK authorities on the potential exclusion of these branches from the scope of the UK depositor protection scheme. EBA believes that the EU DGSDAs need to take active steps to ensure that deposits in such branches operating in the EU continue to be adequately protected after Brexit. To ensure that covered deposits are protected, EBA recommends that the branches become members of local EU DGSs. Additionally, EBA explains when, how, and by whom the depositors should be informed about any potential changes to the protection of their deposits. The opinion highlights to the DGSDAs the potential issues stemming from depositors in branches of EU credit institutions operating in the UK potentially being covered by both the UK and the EU DGSs.
Related Links: Press Release
Keywords: Europe, EU, UK, Banking, Brexit, Deposit Guarantee Schemes, DGSDA, EBA
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