Featured Product

    EBA Issues Opinion on Implementation of Deposit Guarantee Directive

    October 30, 2019

    EBA published its second opinion on implementation of the Deposit Guarantee Schemes Directive (DGSD) in EU. The Opinion, which is addressed to EC, is focused on the payouts by deposit guarantee schemes and proposes a number of changes to the EU legal framework; the proposed changes are intended to strengthen depositor protection, improve depositor information, enhance financial stability, and reinforce operational effectiveness of deposit guarantee schemes. EBA invites EC to consider the proposals outlined in the Opinion when preparing a report on the implementation of the DGSD to be submitted to the European Parliament and the Council.

    In its Opinion, EBA assesses nine different topics related to deposit guarantee scheme payouts and sets out 30 proposals on how to improve the current EU legal framework. The proposals include changes in relation to cases where depositors have lost access to their funds but payouts have not started and cases where there are money laundering and terrorism financing (ML/TF) concerns. The Opinion also proposes improvements to the treatment of specific situations, such as the treatment of beneficiary accounts and depositors temporarily holding deposits above the coverage level or with banks headquartered in another EU member state. Based on recent real-life cases, the Opinion proposes changes to ensure that depositors are not unduly left without access to their funds when the decision that deposits have become unavailable has not (yet) been made by the authorities. The Opinion proposes that, in such instances, depositors should have access to an appropriate daily amount from their deposits.

    Similarly, EBA proposes that the EU framework could benefit from more clarity on deposit guarantee scheme payouts where there are ML/TF concerns, including the introduction of powers necessary to suspend payouts to depositors suspected of ML/TF. The Opinion also proposes how cooperation between deposit guarantee schemes and anti-money laundering authorities can be improved and highlights the importance of informing depositors in such instances. Given the complexity of such cases, EBA is of the view that further analysis is needed, both from the deposit guarantee scheme and the anti-money laundering perspective. 

    Finally, throughout the Opinion, EBA underlines the importance of enhancing depositor protection and clearly informing depositors about the most relevant features of such protection, in normal times as well as during a deposit guarantee scheme payout. In this respect, EBA proposes, for example, that depositors should be clearly informed about their rights in relation to temporary high balances and the possibility that their deposits would be set-off against their liabilities that have fallen due before their deposits had became unavailable. EBA also proposes that depositors should have sufficient time to claim their funds after a bank failure.

    Article 19(6) of DGSD requires EBA to support EC in its development of a report on the progress toward the implementation of DGSD. This Opinion is the second part of the fulfillment of this mandate by EBA. This Opinion follows the first opinion, which was published in August 2019 and covered the eligibility of deposits, coverage level, and cooperation between deposit guarantee schemes. The third and final EBA opinion on deposit guarantee scheme funding and uses of deposit guarantee scheme funds will be published in early 2020.


    Related Links

    Keywords: Europe, EU, Banking, Deposit Guarantee Schemes, DGSD, EDIS, ML/TF Risk, Opinion, EC, EBA

    Related Articles

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    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.

    January 04, 2023 WebPage Regulatory News

    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.

    January 01, 2023 WebPage Regulatory News

    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.

    December 30, 2022 WebPage Regulatory News

    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.

    December 29, 2022 WebPage Regulatory News

    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.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    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.

    December 22, 2022 WebPage Regulatory News

    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.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699