On 28 April 2021, the European Banking Authority (EBA) issued a consultation on draft guidelines on the delineation and reporting of available financial means of deposit guarantee schemes.

Article 10(10) of the Deposit Guarantee Schemes Directive (DGSD) requires deposit guarantee schemes (DGSs) to report their available financial means (AFM) to the EBA. AFM are defined in the DGSD in Article 2(1)(12) as being cash, deposits, low-risk assets which can be liquidated within a period not exceeding that referred to in Article 8(1) DGSD (liquid low risk assets) and payment commitments. The second sub-paragraph to Article 10(1) of the DGSD further states that DGSs shall raise the AFM by contributions to be made by their members.

The EBA published an opinion in January 2020 covering deposit guarantee scheme funding and uses of deposit guarantee scheme funds. The opinion was addressed to the European Commission and proposed considerations for amendments when revising the DGSD. In the opinion the EBA recommended amending the DGSD to unequivocally state that borrowed funds or funds stemming from borrowed funds should not be included in a DGS’s calculation of its AFM and so do not count towards reaching the minimum target level for DGS funds. The opinion also recommended further clarification in relation to the treatment of recoveries, administrative fees, income from investment activities and unclaimed repayments, and whether these funds qualify for counting towards reaching the target level or not.

In line with the recommendations in the opinion the EBA has now issued a consultation setting out proposals for guidelines on the delineation and reporting of AFM of DGSs. The proposed guidelines clarify the criteria for delineating different subsets of AFM, most notably that subset that counts towards reaching the target level. The guidelines also cover the treatment of recoveries, administrative fees, investment income and unclaimed repayments with regard to the AFM and the reaching the target level. Furthermore, they extend the reporting requirements of DGS data to the EBA.

The deadline for comments on the consultation is 28 July 2021.