17 January 2018
The European Banking Authority (EBA) published today a Report on the implementation of its Guidelines on methods for calculating contributions to deposit guarantee schemes (DGSs). The Report, which assesses authorities' compliance with the principles outlined in the EBA Guidelines, concludes that further analysis and greater experience of the risk-based systems in use is needed before proposing any changes to the current Guidelines.
The EBA's analysis shows that the Guidelines have broadly met the aim of introducing different contribution levels for institutions according to their riskiness. However, the analysis also finds that the method outlined in the Guidelines, and currently in use, allows too much flexibility, and it may need to be reviewed in the future to ensure a more consistent approach, while still catering for national specificities.
The Report also highlights that the approach taken by Member States in line with the Guidelines seems to ensure a good level of transparency to stakeholders and not to cause excessive additional reporting requirements. Therefore, at present, there does not appear to be a specific need for amending the Guidelines. However, some further ideas in the way information is disclosed to the contributing institutions may be considered in the future.
The preliminary conclusions of the EBA's assessment are based on limited experience of operating risk-based contributions systems across most DGSs. In addition, the data only covers one year of risk-based contributions based on the method outlined in the Guidelines. With time, better quality data and a longer time series will become available. Therefore, further analysis and greater experience of the risk-based systems will be needed before proposing any changes to the current Guidelines.
Legal basis, background and next steps
The assessment on the implementation of the methods for calculating contributions to DGS has been carried out in accordance with Article 13(3) of the DGSD which mandates the EBA to conduct a review of the Guidelines on risk-based or alternative own-risk-based methods applied by DGSs by 3 July 2017 and at least every five years thereafter.
Considering the short timeframe between the deadline for the implementation of the Guidelines and that of their review, the EBA conducted an assessment of the application of the Guidelines and made some preliminary recommendations on further improvements and amendments to be considered as part of a wider review of the DGSD in 2019.
The EBA Guidelines set principles and specify the necessary elements for calculating risk-based contributions from banks to DGSs. They foster convergence in contributions practices across the EU and promote a level playing field for banks within the Single Market. DGSs should have had these risk-based methods for calculating contributions from their members in place by 31 May 2016 at the latest.