On 29 July 2022, the European Banking Authority (EBA) launched a public consultation on its draft revised Guidelines on deposit guarantee schemes (DGS) contributions. The revised Guidelines are aimed at enhancing the proportionality between the risk of a credit institution and its contributions to the DGS, and at streamlining and simplifying the original Guidelines.
In its 2021-2022 review of the Guidelines, the EBA identified that credit institutions that became subject to a DGS intervention since 2015 were mostly categorised amongst the riskiest member of their DGS. Thus, the EBA concluded that the methodology set out in the Guidelines remains appropriate. Nonetheless, the EBA identified elements that should be improved.
Key proposals included in this consultation paper are to:
- set minimum thresholds for the majority of core risk indicators and adjust their minimum weights to better reflect the indicator’s performance in measuring the risk to the DGSs;
- introduce an improved formula for determining the risk adjustment factor of each member institution to ensure a constant relationship between the riskiness of institutions and their DGS contributions; and
- specify how to account for deposits where the DGS coverage is subject to uncertainty, including in relation to client funds, thus ensuring closer alignment between the amount of covered deposits of a credit institution and its contributions.
Furthermore, the EBA has sought to streamline and simplify the Guidelines significantly in order to make them clearer.
Comments to this consultation paper can be sent to the EBA by clicking on the “send your comments” button on the consultation page. The consultation will run until 31 October 2022.
A public hearing on the draft revised Guidelines will take place via online meeting on Thursday 29 September 2022 from 10:00 to 12:00 CEST. You can register for the hearing here by 27 September 2022.
