11. The financial means referred to in Article 10 shall be primarily used in order to repay depositors pursuant to this Directive. 1. (14)  Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ L 145, 30.4.2004, p. 1). During the transitional period until 31 December 2023, where DGSs cannot make the repayable amount available within seven working days they shall ensure that depositors have access to an appropriate amount of their covered deposits to cover the cost of living within five working days of a request. If a credit institution does not comply with the obligations incumbent on it as a member of a DGS, the competent authorities shall be notified immediately and, in cooperation with the DGS, shall promptly take all appropriate measures including if necessary the imposition of penalties to ensure that the credit institution complies with its obligations. Member States shall ensure that DGSs have in place adequate alternative funding arrangements to enable them to obtain short-term funding to meet claims against those DGSs. It should also be possible, where permitted under national law, for a DGS to go beyond a pure reimbursement function and to use the available financial means in order to prevent the failure of a credit institution with a view to avoiding the costs of reimbursing depositors and other adverse impacts. However, for a limited time, it should be possible to cover certain deposits relating to the personal situation of depositors at a higher level. On the one hand, the cost of financing DGSs should, in principle, be borne by credit institutions themselves and, on the other, the financing capacity of DGSs should be proportionate to their liabilities. Interest on deposits which has accrued until, but has not been credited at, the date on which a relevant administrative authority makes a determination as referred to in point (8)(a) of Article 2(1) or a judicial authority makes a ruling as referred to in point (8)(b) of Article 2(1) shall be reimbursed by the DGS. For that purpose, the credit institution shall transmit the necessary information on deposits and depositors as soon as requested by the DGS. The harmonised level of coverage provided for in this Directive should not affect schemes protecting the credit institution itself unless they repay depositors. 9. Exceptions for certain deposits are stated on the website of the responsible Deposit Guarantee Scheme. 2. If the measures taken under paragraph 4 fail to secure compliance on the part of the credit institution, the DGS may, subject to national law and the express consent of the competent authorities, give not less than one month’s notice of its intention to exclude the credit institution from membership of the DGS. Such uncoordinated increases have drained liquidity from credit institutions in times of stress. Given the different living costs between the Member States, that amount should be determined by the Member States. 4. It is therefore reasonable to set the harmonised coverage level at EUR 100 000. 9. 2. The EU has gradually increased the level of deposit protection since the first directive for DGS was introduced in 1994. Directive 2009/14/EC of the European Parliament and of the Council (8) introduced a fixed coverage level of EUR 100 000, which has put some Member States in the situation of having to lower their coverage level, with risks of undermining depositor confidence. EN (4) In order to take account … The resolution authority shall determine, after consulting the DGS, the amount by which the DGS is liable. DGSs set up and officially recognised in 1 EU country must cover the depositors at branches of their members in other EU countries. Member States shall inform the Commission and EBA of the identity of their designated authority by 3 July 2015. Member States may limit the time in which depositors whose deposits were not repaid or acknowledged by the DGS within the deadlines set out in Article 8(1) and (3) can claim the repayment of their deposits. 8. It should also lead to a fair calculation of contributions and provide incentives to operate under a less risky business model. Where credit institutions are allowed under national law to operate under different trademarks as defined in Article 2 of Directive 2008/95/EC of the European Parliament and of the Council (16), the Member State shall ensure that depositors are informed clearly that the credit institution operates under different trademarks and that the coverage level laid down in Article 6(1), (2) and (3) of this Directive applies to the aggregated deposits the depositor holds with the credit institution. DGSs shall raise the available financial means by contributions to be made by their members at least annually. The Cyprus Deposit Protection Scheme (DPS) is based on EU directive 2014/49/EU and is an external guarantee that covers bank deposits up to 100.000 Euro for customers of commercial banks active in … Such deposits should be offset against the outstanding amount of the loan. EDIS is the third pillar of the banking union. whether the matters referred to in this subparagraph have been dealt with in a manner that maintains the protection of depositors. The calculation of contributions shall be proportional to the risk of the members and shall take due account of the risk profiles of the various business models. In any event, contractual schemes and IPS are subject to State aid rules. 1. Confirmation that the deposits are eligible deposits shall be provided to depositors on their statements of account including a reference to the information sheet set out in Annex I. Member States shall check that branches established in their territory by a credit institution which has its head office outside the Union have protection equivalent to that prescribed in this Directive. Since the objective of this Directive, namely the harmonisation of rules concerning the functioning of DGSs, cannot be sufficiently achieved by the Member States, but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. The absence of such agreements shall not affect the claims of depositors under Article 9(1) or of credit institutions under paragraph 3 of this Article. If the available financial means of a DGS are insufficient to repay depositors when deposits become unavailable, its members shall pay extraordinary contributions not exceeding 0,5 % of their covered deposits per calendar year. The available financial means of DGSs shall be invested in a low-risk and sufficiently diversified manner. In order to tailor contributions to market circumstances and risk profiles, DGSs should be able to use their own risk-based methods. Deposit Guarantee Schemes have been harmonised across the member states of the EU, protecting the first EUR100,000/ £85,000 of eligible deposits held with banks in the event that they fail. 2. Having regard to the proposal from the European Commission. This will improve consumer confidence in financial stability throughout the internal market. Member States may provide that deposits in an account to which two or more persons are entitled as members of a business partnership, association or grouping of a similar nature, without legal personality, may be aggregated and treated as if made by a single depositor for the purpose of calculating the limit provided for in Article 6(1). Member States shall determine how such reference is to be made and how that statement is to be formulated. Their limited number compared to all other depositors minimises the impact on financial stability in the case of a failure of a credit institution. If, on expiry of that notice period, the credit institution has not complied with its obligations, the DGS shall exclude the credit institution. In such cases the third-party guarantee shall be limited to the coverage level laid down in Article 6(1). If insolvency of your credit institution should occur, your deposits would in any case be repaid up to EUR 100 000 [replace by adequate amount if currency not EUR]. Review of Directive 94/19/EC on Deposit Guarantee Schemes The ABI’s Response to the EU Commission’s Consultation Introduction 1. Until the target level has been reached for the first time, Member States may apply the thresholds in Article 11(5) in relation to the available financial means. (3)  Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes (OJ L 135, 31.5.1994, p. 5). The period necessary for the repayment of deposits should take into account cases where schemes have difficulty in determining the amount of repayment and the rights of the depositor, in particular if deposits arise from residential housing transactions or certain life events, if a depositor is not absolutely entitled to the sums held on an account, if the deposit is the subject of a legal dispute or competing claims to the sums held on the account or if the deposit is the subject of economic sanctions imposed by national governments or international bodies. When performing the check provided for in the first subparagraph of this paragraph, Member states shall at least check that depositors benefit from the same coverage level and scope of protection as provided for in this Directive. 3. 3. It should be possible for the available financial means of DGSs to include cash, deposits, payment commitments and low-risk assets, which can be liquidated within a short period of time. If, after a thorough examination, appropriate authorities establish that a DGS is not yet in a position to comply with Article 13 by 3 July 2015, the relevant laws, regulations and administrative provisions shall be brought into force by 31 May 2016. The content of such information should be identical for all depositors. In general, all retail depositors and businesses are covered by Deposit Guarantee Schemes. This Directive should not prevent Member States from including within its scope credit institutions as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council (5) which fall outside the scope of Directive 2013/36/EU of the European Parliament and of the Council (6) pursuant to Article 2(5) of that Directive. The competent authorities should be able to recognise IPS as DGSs if they fulfil all criteria laid down in this Directive. Acknowledgement of receipt by the depositor: Additional information (all or some of the below). 4. 4. Electronic money and funds received in exchange for electronic money should not, in accordance with Directive 2009/110/EC of the European Parliament and of the Council (9), be treated as a deposit and should not therefore fall within the scope of this Directive. Without prejudice to rights which it may have under national law, the DGS that makes payments under guarantee within a national framework shall have the right of subrogation to the rights of depositors in winding up or reorganisation proceedings for an amount equal to their payments made to depositors. If you have not been repaid within these deadlines, you should contact the Deposit Guarantee Scheme since the time to claim reimbursement may be barred after a certain time limit. The DGS of the host Member State shall make repayments in accordance with the instructions of the DGS of the home Member State. If you have a joint account with other person(s): The limit of EUR 100 000 [replace by adequate amount if currency not EUR] applies to each depositor separately (3). Append an asterisk (, Other sites managed by the Publications Office, Portal of the Publications Office of the EU. At a European level, any deposit holder would currently recoup up to 100,000 Euros of their deposits … 3. The loan shall be subject to the following conditions: the borrowing DGS must repay the loan within five years. Directive 94/19/EC as amended by the Directives listed in Annex II is repealed with effect from 4 July 2019 without prejudice to the obligations of the Member States relating to the time limits for transposition into national law and the dates of application of the Directives set out in Annex II. (1)  [Only where applicable:] Your deposit is covered by a contractual scheme officially recognised as a Deposit Guarantee Scheme. Points (a), (b) and (c) of Article 5(1), Article 6(1), Article 7(1), (2) and (3), Article 8(8), Article 9(1) and Article 17 shall apply from 4 July 2015. 5. The European Union (Withdrawal) Act 2018 (EUWA) repeals the European Communities Act 1972 on the day the UK leaves the EU and converts into UK domestic law the existing body of directly applicable EU law. 7. Where a DGS makes payments in the context of resolution proceedings, including the application of resolution tools or the exercise of resolution powers in accordance with Article 11, the DGS shall have a claim against the relevant credit institution for an amount equal to its payments. Member States shall ensure that, by 3 July 2024, the available financial means of a DGS shall at least reach a target level of 0,8 % of the amount of the covered deposits of its members. The amount referred to in paragraph 1 shall be reviewed periodically by the Commission and at least once every five years. [Add information on emergency/interim payout if repayable amount(s) are not available within 7 working days.]. 7. The repayable amount shall be made available without a request to a DGS being necessary. Repealed Directives together with their successive amendments (referred to in Article 21), Directive 94/19/EC of the European Parliament and of the Council, Directive 2009/14/EC of the European Parliament and of the Council, Deadlines for transposition (referred to in Article 21), 2009/14/EC (second paragraph of point 3(i) of Article 1, Article 7(1a) and (3) and Article 10(1) of Directive 94/19/EC as amended by Directive 2009/14/EC), Use quotation marks to search for an "exact phrase". The following shall be excluded from any repayment by a DGS: subject to Article 7(3) of this Directive, deposits made by other credit institutions on their own behalf and for their own account; own funds as defined in point (118) of Article 4(1) of Regulation (EU) No 575/2013; deposits arising out of transactions in connection with which there has been a criminal conviction for money laundering as defined in Article 1(2) of Directive 2005/60/EC; deposits by financial institutions as defined in point (26) of Article 4(1) of Regulation (EU) No 575/2013; deposits by investment firms as defined in point (1) of Article 4(1) of Directive 2004/39/EC; deposits the holder of which has never been identified pursuant to Article 9(1) of Directive 2005/60/EC, when they have become unavailable; deposits by insurance undertakings and by reinsurance undertakings as referred to in Article 13(1) to (6) of Directive 2009/138/EC of the European Parliament and of the Council (15); deposits by collective investment undertakings; deposits by pension and retirement funds; debt securities issued by a credit institution and liabilities arising out of own acceptances and promissory notes. As a result of recent changes, all deposit guarantee schemes have been harmonized, so that the same high standard is offered within the EU. (3)  In case of joint accounts, the limit of EUR 100 000 applies to each depositor. Member States should be able to limit the time in which depositors whose deposits were not repaid, or not acknowledged within the deadline for repayment, can claim repayment of their deposits, in order to enable DGSs to exercise the rights into which it is subrogated by the date on which those rights are due to be registered in insolvency proceedings. 3. This Directive retains the principle of a harmonised limit per depositor rather than per deposit. (5)  Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). It is necessary that the available financial means of DGSs amount to a certain target level and that extraordinary contributions may be collected. Member States shall ensure that DGSs have in place adequate systems to determine their potential liabilities. Directive 94/19/EC requires the Commission, if appropriate, to put forward proposals to amend that Directive. In order to ensure consistent application of this Directive, EBA shall, by 3 July 2015, issue guidelines pursuant to Article 16 of Regulation (EU) No 1093/2010 to specify methods for calculating the contributions to DGSs in accordance with paragraphs 1 and 2 of this Article. The aim is for the institutions themselves to bear the risk of having to compensate … Member States should ensure that the protection of deposits resulting from certain transactions, or serving certain social or other purposes, is higher than EUR 100 000 for a given period. This Directive is addressed to the Member States. The restrictions set out in that Article shall apply. DIRECTIVE 2014/49/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on deposit guarantee schemes (recast) (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 53(1) … Member States shall ensure that when notifying EBA of authorisations in accordance with Article 20(1) of Directive 2013/36/EU, competent authorities shall indicate of which DGS each credit institution is a member. The appropriate amount as referred to in the first subparagraph shall be deducted from the repayable amount as referred to in Article 7. Member States shall identify the relevant administrative authority in their Member State for the purpose of point (8)(a) of Article 2(1). They shall acknowledge the receipt of that information. In many cases, however, the necessary procedures for a short time limit for repayment do not yet exist. In the recent financial crisis, uncoordinated increases in coverage across the Union have in some cases led to depositors transferring money to credit institutions in countries where deposit guarantees were higher. 6. In order to ensure efficient and effective functioning of DGSs and a balanced consideration of their positions in different Member States, EBA should be able to settle disagreements between them with binding effect. 6. Implementing such measures should be subject to the imposition of conditions on the credit institution involving at least more stringent risk-monitoring and greater verification rights for the DGSs. EU countries must. References to the repealed Directives shall be construed as references to this Directive and shall be read in accordance with the correlation table in Annex III. It shall not affect the validity of any delegated acts already in force. Under EU rules, deposit guarantee schemes. 2 See Annex III. Intending depositors should be provided with the same information by way of a standardised information sheet, receipt of which they should be asked to acknowledge. If a credit institution operates directly in another Member State without having established branches, the information shall be provided in the language that was chosen by the depositor when the account was opened. Member States shall ensure that credit institutions make available to actual and intending depositors the information necessary for the identification of the DGSs of which the institution and its branches are members within the Union. The other, the Investor Compensation Schemes Directive (ICSD) is discussed in Practice Note Investor Compensation Schemes Directive. Directive 94/19/EC is based on the principle of minimum harmonisation. The existing repayment period runs counter to the need to maintain depositor confidence and does not meet depositors’ needs. 6. (2)  Position of the European Parliament of 16 February 2012 (OJ C 249 E, 30.8.2013, p. 81) and Decision of the Council at first reading of 3 March 2014 (not yet published in the Official Journal). It should be possible to exclude from repayment deposits where, in accordance with national law, the funds deposited are not at the disposal of the depositor because the depositor and the credit institution have contractually agreed that the deposit would serve only to pay off a loan contracted for the purchase of a private immovable property. Article 19 (6) of the Deposit Guarantee Schemes Directive (DGSD) requires the European Commission to submit to the European Parliament and to the Council a report on the progress towards the implementation of the DGSD. DGSs shall repay that amount through contributions from their members in accordance with Article 10(1) and (2). 5. 1. Those measures should, however, be carried out within a clearly defined framework and should in any event comply with State aid rules. 8. It will repay your deposits (up to EUR 100 000 [replace by adequate amount if … Member States may round off the amounts resulting from the conversion, provided that such rounding off does not exceed EUR 5 000. (10)  Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (OJ L 309, 25.11.2005, p. 15). 1. Contributions to DGSs should be based on the amount of covered deposits and the degree of risk incurred by the respective member. Repayment as referred to in paragraphs 1 and 4 may be deferred where: it is uncertain whether a person is entitled to receive repayment or the deposit is subject to legal dispute; the deposit is subject to restrictive measures imposed by national governments or international bodies; by way of derogation from paragraph 9 of this Article there has been no transaction relating to the deposit within the last 24 months (the account is dormant); the amount to be repaid is deemed to be part of a temporary high balance as defined in Article 6(2); or. 9. In order to ensure that depositors in all Member States enjoy a similarly high level of protection, the financing of DGSs should be harmonised at a high level with a uniform ex-ante financial target level for all DGSs. 6. 4. DGSs shall ensure that the repayable amount is available within seven working days of the date on which a relevant administrative authority makes a determination as referred to in point (8)(a) of Article 2(1) or a judicial authority makes a ruling as referred to in point (8)(b) of Article 2(1). This proposal was adopted as a part of a broader package of measures to deepen the economic and monetary union, and complete the banking union. An IPS may be officially recognised as a DGS if it fulfils the criteria laid down in Article 113(7) of Regulation (EU) No 575/2013 and complies with this Directive. Depositors shall be informed of the currency of repayment. The ABI is the voice of the insurance and investment industry. Member States shall ensure that the contributions levied by the borrowing DGS are sufficient to reimburse the amount borrowed and to re-establish the target level as soon as possible. The European Commission proposed in July 2010 a comprehensive review of the Directive on Deposit Guarantee Schemes (DGS) aimed at harmonising and simplifying the Directive in order to improve protection of deposits… Consequently, a variety of DGSs with very distinct features currently exist in the Union. in the official language or languages of the Member State in which the covered deposit is located. 2. In that case, the target level and the contributions of the credit institutions shall be adjusted accordingly. the banking sector in which the credit institutions affiliated to the DGS operate is highly concentrated with a large quantity of assets held by a small number of credit institutions or banking groups, subject to supervision on a consolidated basis which, given their size, are likely in case of failure to be subject to resolution proceedings. In view of the costs of the failure of a credit institution to the economy as a whole and its adverse impact on financial stability and the confidence of depositors, it is desirable not only to make provision for reimbursing depositors but also to allow Member States sufficient flexibility to enable DGSs to carry out measures to reduce the likelihood of future claims against DGSs. The power to adopt delegated acts referred to in Article 6(7) shall be conferred on the Commission for an indeterminate period of time. The PRA Consultation Paper (CP20/14) implements the recast EU Deposit Guarantee Schemes Directive (DGSD), and it seems to carry numerous substantial additions to the current reporting process. Without prejudice to Article 16(5) and (7), the following schemes shall not be subject to this Directive: contractual schemes that are not officially recognised as DGSs, including schemes that offer an additional protection to the coverage level laid down in Article 6(1); institutional protection schemes (IPS) that are not officially recognised as DGSs. 2. EU legislation protects banks deposits in case of bank failure. The regular contribution shall take due account of the phase of the business cycle, and the impact procyclical contributions may have when setting annual contributions in the context of this Article. 2. The available financial means of DGSs shall be proportionate to those liabilities. 5. DGSs should also assist in the financing of the resolution of credit institutions in accordance with Directive 2014/59/EU of the European Parliament and of the Council (7). In principle, this Directive requires every credit institution to join a DGS. With regard to this Directive, the legislator considers the transmission of such documents to be justified. a judicial authority has made a ruling for reasons which are directly related to the credit institution’s financial circumstances and which has the effect of suspending the rights of depositors to make claims against it; ‘credit institution’ means a credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013; ‘branch’ means a place of business in a Member State which forms a legally dependent part of a credit institution and which carries out directly all or some of the transactions inherent in the business of credit institutions; ‘target level’ means the amount of available financial means which the DGS is required to reach in accordance with Article 10(2), expressed as a percentage of covered deposits of its members; ‘available financial means’ means cash, deposits and low-risk assets which can be liquidated within a period not exceeding that referred to in Article 8(1) and payment commitments up to the limit set out in Article 10(3); ‘payment commitments’ means payment commitments of a credit institution towards a DGS which are fully collateralised providing that the collateral: is unencumbered by any third-party rights and is at the disposal of the DGS; ‘low-risk assets’ means items falling into the first or second category referred to in Table 1 of Article 336 of Regulation (EU) No 575/2013 or any assets which are considered to be similarly safe and liquid by the competent or designated authority; ‘home Member State’ means a home Member State as defined in point (43) of Article 4(1) of Regulation (EU) No 575/2013; ‘host Member State’ means a host Member State as defined in point (44) of Article 4(1) of Regulation (EU) No 575/2013; ‘competent authority’ means a national competent authority as defined in point (40) of Article 4(1) of Regulation (EU) No 575/2013; ‘designated authority’ means a body which administers a DGS pursuant to this Directive, or, where the operation of the DGS is administered by a private entity, a public authority designated by the Member State concerned for supervising that scheme pursuant to this Directive. Liabilities of the depositor against the credit institution shall not be taken into account when calculating the repayable amount. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. This Directive should not result in the Member States or their relevant authorities being made liable in respect of depositors if they have ensured that one or more schemes guaranteeing deposits or credit institutions themselves and ensuring the compensation or protection of depositors under the conditions prescribed in this Directive have been introduced and officially recognised. The information provided for in paragraph 1 shall be made available in the manner prescribed by national law in the language that was agreed by the depositor and the credit institution when the account was opened or in the official language or languages of the Member State in which the branch is established. Member States may decide that deposits referred to in Article 7(3) are subject to a longer repayment period, which does not exceed three months from the date on which a relevant administrative authority makes a determination as referred to in point (8)(a) of Article 2(1) or a judicial authority makes a ruling as referred to in point (8)(b) of Article 2(1). Competent authorities, designated authorities, resolution authorities and relevant administrative authorities shall cooperate with each other and exercise their powers in accordance with this Directive. The pan-European Deposit Guarantee Scheme could be a potential option in the future once the current banking reforms (e.g. Member States should be able to decide that, for the purpose of this Directive, the central body and all credit institutions affiliated to that central body are treated as a single credit institution.
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