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In its Opinion, the EBA assesses 33 different topics related to DGS funding and uses of DGS funds and sets out 23 proposals on how to improve current EU legal framework.
In particular, the EBA calls for the need to clarify in the DGSD what funds should count towards the DGS’s available financial means (i.e. ex-ante funds), and when different DGS funding sources (including loans) can be used and under what conditions.
The Opinion also addresses the need to introduce more transparency in relation to the reporting of DGS funds, more consistency in the approach to payment commitments, and more precision in the DGSD in relation to how DGS funds should be invested.
In addition, the Opinion recommends the need for the Commission to consider further the consequences of the recent General Court ruling in the Tercas case, concerning the use of DGS funds to prevent failure of credit institutions and the ceiling up to which DGS funds can be used for such failure prevention. The Commission should also consider introducing in the EU framework the possibility to use failed institution’s assets to repay depositors.
No changes are proposed to the current DGSD provisions in relation to the minimum target level for the ex-ante funds, the target level basis and the possibility for DGSs to continue collecting contributions above the minimum target level.
The Opinion also recommends that there is no need for changes in relation to contributions from third country branches, or immediate changes to the risk-based contributions based on the assessment of their impact on different business models.