An institutional protection scheme (IPS) is defined in the Capital Requirements Regulation (CRR) as a contractual or statutory liability arrangement which protects its member institutions and in particular ensures that they have liquidity and solvency needed to avoid bankruptcy where necessary. Member state competent authorities may, in accordance with the CRR, waive selected prudential requirements or allow certain derogations for IPS member institutions. At present, IPSs are recognised for CRR purposes in three countries participating in the Single Supervisory Mechanism: Austria, Germany and Spain.
The European Central Bank (ECB) has now published a guide on its approach when assessing the eligibility of an IPS for prudential supervisory purposes. The guide aims to ensure that a coherent, effective and transparent policy will be applied when assessing IPSs in accordance with the CRR.
View ECB guide on assessing eligibility of institutional protection schemes, 12 July 2016