Question ID:
Legal Act:
Directive 2014/59/EU (BRRD)
Resolution tools and powers
44, 109
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Disclose name of institution / entity:
Type of submitter:
Competent authority
Subject Matter:
Deposit Guarantee Scheme (DGS) contributions couning towards the 8% requirement

On what basis is the 8% in Article 44(5) of Directive 2014/59/EU (BRRD) to be applied? Do Deposit Guarantee Scheme (DGS) contributions count towards the 8% requirement?

Background on the question:

The DGS payment is mandatory and in some cases will serve to absorb losses in place of excluded deposits. However, Article 44(5)(a) of the BRRD appears to prevent it from counting because it refers to a “contribution … made by shareholders and the holders of other instruments of ownership, the holders of relevant capital instruments and other eligible liabilities through write down, conversion or otherwise.” Since a contribution by the DGS is neither a contribution by a holder of capital or an eligible liability, it does not appear to count towards the 8%.

Date of submission:
Published as Final Q&A:
Final Answer:

There are two aspects in this question:                                                            

One question is the basis to which the 8% is to be applied. On this point, Article 44(5), point (a), is clear that the 8% is calculated over total liabilities (this includes covered deposits), including own funds.                                                                     

The second question is who should contribute to the 8% absorption before using the resultion fund RF. As regards this question:

Article 44(5), point (a), subjects the use of the resultion fund RF for the purposes of Articles 44(3) and (4) to a prior contribution of 8% of total liabilities including own funds, to be made by shareholders, holders of other instruments of ownership, holders of relevant capital instruments and  of other eligible liabilities.The definition of eligible liabilities in Article 2(1), point (71), excludes explicitly liabilities that are excluded from the scope of the bail in; this is the case of covered deposits.

Therefore, if the bail in of shareholders and eligible liabilities does not reach 8%, resort to the RF is, in principle, not possible and the DGS will step in for covered deposits. 

Therefore, if the bail-in of shareholders and bail-inable liabilities does not reach 8%, resort to the resolution fund is, in principle, not possible and the Deposit Guarantee Scheme (DGS) is liable in accordance with Article 109.


The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.

Final Q&A
Answer prepared by:
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A:

Update 26.03.2021: This Q&A has not yet been reviewed by the European Commission in the light of the changes introduced to Directive 2014/59/EU (BRRD).

Update 02.12.2021: This Q&A has been updated in the light of the changes introduced to Directive 2014/59/EU (BRRD).