31 October 2019

EBA publishes Opinion proposing to further strengthen depositor protection in the EU

The Opinion focuses on the payouts by deposit guarantee schemes (DGSs) and proposes a number of changes to the EU legal framework, aimed at strengthening depositor protection, improving depositor information, enhancing financial stability and reinforcing operational effectiveness of DGSs.

In its Opinion, the EBA assesses nine different topics related to DGS payouts and sets out 30 proposals on how to improve the current EU legal framework. The proposals include changes in relation to cases where depositors have lost access to their funds but payouts have not started, and cases where there are money laundering and terrorism financing (ML/TF) concerns. The Opinion also proposes improvements to the treatment of specific situations, such as the treatment of beneficiary accounts and depositors temporarily holding deposits above the coverage level or with banks headquartered in another EU Member State.

More specifically, based on recent real-life cases, the Opinion proposes changes aimed at ensuring that depositors are not unduly left without access to their funds when the decision  that deposits have become unavailable has not (yet) been made by the authorities. The Opinion proposes that, in such instances, depositors should have access to an appropriate daily amount from their deposits.

Similarly, the EBA proposes that the EU framework could benefit from more clarity on DGS payouts where there are ML/TF concerns, including the introduction of powers necessary to suspend payouts to depositors suspected of ML/TF. The Opinion also proposes how cooperation between DGSs and AML authorities can be improved and highlights the importance of informing depositors in such instances. Given the complexity of such cases, the EBA is of the view that further analysis is needed, both from the DGS and the AML perspective.

Finally, throughout the Opinion, the EBA underlines the importance of enhancing depositor protection, and clearly informing depositors about the most relevant features of such protection, in normal times, as well as during a DGS payout.

Full press release on EBA

Full opinion on EBA

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