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Document 52014PC0140
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the Council’s position at first reading with a view to adopting a Directive of the European Parliament and of the Council on Deposit Guarantee Schemes [recast] 2010/0207 (COD)
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the Council’s position at first reading with a view to adopting a Directive of the European Parliament and of the Council on Deposit Guarantee Schemes [recast] 2010/0207 (COD)
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the Council’s position at first reading with a view to adopting a Directive of the European Parliament and of the Council on Deposit Guarantee Schemes [recast] 2010/0207 (COD)
/* COM/2014/0140 final - 2010/0207 (COD) */
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the Council’s position at first reading with a view to adopting a Directive of the European Parliament and of the Council on Deposit Guarantee Schemes [recast] 2010/0207 (COD) /* COM/2014/0140 final - 2010/0207 (COD) */
2010/0207 (COD) COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT
pursuant to Article 294(6) of the Treaty on the Functioning of the European
Union
concerning the Council’s position at first reading with a
view to adopting a Directive of the European Parliament and of the Council on
Deposit Guarantee Schemes [recast]
2010/0207 (COD) (Text with EEA relevance) 1. Background Date on which the proposal was sent to the European Parliament and to the Council (document COM(2010)368 final – 2010/0207 (COD): || 12/07/2010. Date of the opinion of the European Central Bank || 17/02/2011. Date of the opinion of the European Economic and Social Committee: || ---- Date of the position of the European Parliament, first reading: || 16/02/2012. Date on which the amended proposal was sent: || Not applicable. Date of endorsement of the political agreement in COREPER: Date of adoption of the Council’s position: || 20 December 2013. 3 March 2014. 2. Objective of the Commission’s
proposal Deposit Guarantee Schemes (DGS) currently exist
in all Member States under Directive 94/19/EC (DGS Directive). DGSs must
compensate depositors up to EUR 100 000 for bank deposits which are
unavailable. DGSs are an important instrument to preserve trust in the banking
system and avoid bank runs. In July 2010, the Commission adopted its
legislative proposal on the recast of the DGS Directive.
The proposal aimed to: –
improve depositors' access to the guarantee,
with reduced repayment deadlines, single contact points for cross-border
failures, and improved individual depositor information; –
introduce financing rules for DGSs, in
particular requiring mandatory ex ante financing from the banking sector; –
further harmonise the scope of coverage; –
specify the role of DGSs in the crisis
management framework. 3. Comments on the position
of the Council 3.1. General Comments Political agreement was reached between co-legislators
at the trilogue meeting of 17 December 2013. COREPER endorsed the political
agreement on 20 December 2013. The ECON Committee sent a non-objection letter
to COREPER on 10 January 2014. 3.2. Follow up of amendments
introduced by the European Parliament (1)
Scope of coverage: The European Parliament aimed
at maintaining higher coverage of deposits made before 31 December 2010 and which
were held by depositors residing in a Member State which, before 1 January
2008, had a statutory DGS with a coverage level up to EUR 300 000. The political
agreement clarifies this amendment. As a result of the compromise, Member
States with a coverage level up to EUR 300 000 would apply this higher coverage
until 31 December 2018. The Commission considers that this clarification is
beneficial and respects the essence of the European Parliament’s amendment. (2)
Repayment deadlines: The European Parliament
suggested that Member States could maintain the current repayment period of 20
working days until the end of 2016 when it would be shortened to five working
days. During the transitional period, an ‘emergency repayment’ of up to EUR 5 000
would be made available on request. According to the political agreement,
repayment deadlines would be reduced in three phases: –
fifteen working days as from 1 January 2019; –
ten working days as from 1 January 2021; and
eventually –
seven working days as from 1 January 2024. (3)
Financing: The European Parliament had requested
a target level of DGS funds of 1.5% of covered deposits to be reached over 15
years (instead of 1.5% of eligible deposits[1]
within 10 years proposed by the Commission). The political agreement envisages a
target level of 0.8% of covered deposits to be reached within 10 years. The
share of payment commitments that may be counted towards the target level is
increased from 10% as suggested by Parliament, to 30%. In case of insufficient
ex ante funds, DGSs would collect ex post contributions from the banking
sector, and, as a last resort, get access to alternative funding arrangements
such as loans from public or private parties. The political agreement endorses
the originally proposed principle that bank contributions must be risk-weighted.
However the originally proposed annex on the calculation of risk-weights would
be substituted with guidelines from the European Banking Authority (EBA). (4)
Use of funds: The political agreement maintains
the principle, as proposed by the Commission and endorsed by the Parliament, that
DGS funds are to be primarily used to repay depositors but may also be used for
failure prevention or resolution measures under certain conditions. With regard to failure prevention, qualitative
conditions similar to those introduced by the Parliament are envisaged, in
particular ensuring that: –
the scheme is equipped with appropriate systems
and procedures for selecting and implementing alternative measures and
monitoring affiliated risks; –
the measures are linked to conditions imposed on
the credit institution that is being supported, including a minimum of more
stringent risk monitoring and greater verification rights for the DGS; and –
the measures put in place by the DGS are linked
to commitments made by the credit institution being supported, with a view to
securing access to covered deposits. However, the political agreement introduces
further safeguards to prevent moral hazard and to secure sufficient funding for
the scheme, such as a requirement that no resolution measure has been taken
with regard to the credit institution. 3.3. New measures introduced by
the political agreement (1)
Financing: the political agreement introduces
two main elements which did not feature in the Parliament’s legislative
resolution in the first reading. First, the compromise aligns the DGS Directive
with the political agreement on the proposal for a Bank Resolution and Recovery
Directive[2]
by introducing the possibility to raise contributions to existing DGS for the
purpose of covering the costs related to systemic risk, failure and resolution.
These funds will allow bank levies to count towards the target level, provided
that they are not already counted towards resolution funds, and provided that
the DGS is effectively entitled to these sums. Moreover, the political agreement foresees that
the Commission could authorise a Member States to have a target level between
0.5 and 0.8% of covered deposits under the following conditions: (a)
The reduction is based on the assumption that it
is unlikely that a significant share of available means will be used for
measures other than to preserve access of depositors to deposits in resolution
or in national insolvency proceedings; and (b)
The banking sector in that Member State is highly concentrated with a large quantity of assets held by a small number of credit
institutions or banking groups. These are subject to supervision on a
consolidated basis and, given their size, are likely to be subject to
resolution proceedings in case of failure. (2)
Use of funds: The political agreement also
foresees a national option to use DGS funds in the context of national
insolvency proceedings provided that the costs borne by the DGS do not exceed
the net amount of compensating covered depositors at the credit institution
concerned. 4. Conclusion Even though the political agreement diverges
from the Commission proposal to a considerable extent, it achieves the
objectives behind the original Commission proposal. The Commission therefore supports
a Council position that reflects the political agreement of 17 December 2013 so
that the co-legislators can adopt the final text in early second reading before
the end of the legislature. [1] Covered deposits are eligible deposits below the
coverage level of EUR 100 000. [2] Proposal for a Directive of the European Parliament
and of the Council establishing a framework for the recovery and resolution of
credit institutions and investment firms and amending Council Directives
77/91/EEC and 82/891/EC, Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC,
2007/36/EC and 2011/35/EC and Regulation (EU) No 1093/2010, COM(2012) 280 final,
6.6.2012.