Sat. Aug 13th, 2022

4 August 2022

  • From 2020 to 2021, the amount of available financial means held by the Deposit Guarantee Schemes (DGSs) across the European Economic Area (EEA) significantly increased by 19 %. This means that DGSs hold more resources to protect depositors in case of banking failure.
  • DGSs are gradually increasing their funds raised from the industry with the aim of reaching the harmonised minimum target level of 0.8 % of covered deposits by July 2024.
  • The dataset for 2021 includes, for the first time, some new metrics such as the amount of qualified available financial means of the DGSs, which are the funds counting toward reaching DGSs’ target level.
  • The EBA now offers various statistical visualisation tools to make data easier to understand and analyse.

The European Banking Authority (EBA) today published 2021 extended data related to two key concepts and indicators in the Deposit Guarantee Schemes Directive (DGSD), namely available financial means (AFMs) and covered deposits. The EBA publishes these data on a yearly basis to enhance the transparency and public accountability of DGSs across the EEA to the benefit of depositors, markets, policymakers, DGSs and Members States.

It is the first time that the DGS data published by the EBA includes the provisions from the Guidelines on the delineation and reporting of AFMs of the DGSs, issued in December 2021. AFMs are the amount of funds raised by DGSs from banks and their main purpose is to reimburse depositors in case of banking failures. The EBA Guidelines make a distinction between qualified AFMSs (QAFMs – stemming from contributions of DGS member institutions) andr other AFMs (e.g. borrowed funds from loans). Only QAFMs count towards reaching the target level of the DGS fund.

The data as of 31 December 2021 shows that 34 of 36 EEA DGSs had increased their funds since the previous year by more than 19 % (vs. an increase of 12 % in 2020 compared to 2019), which strengthens DGSs’ preparedness to compensate depositors if their bank fails. Covered deposits also increased significantly in 2021, reaching growth rate of 5.6 % over the year. This is lower than the substantial growth rate of 8.6 % observed in 2020, but higher than the growth rate of 4.3 % for the period 2015-2019. The increase, observed in 2020 and confirmed in 2021, could be a consequence of the COVID-19 pandemic as households may have delayed purchases or sought to store their savings safely.

Changes in the AFMs and covered deposits are important because the ratio of QAFMs over covered deposits is the measurement for the target level of 0.8 % of covered deposits set out in the DGSD, which the DGSs need to reach by 3 July 2024. On 31 December 2021, 17 DGSs have already reached the target level while 19 DGSs have yet to reach it. Since the increase in covered deposits in 2021 is above average, DGS contributions might need to be higher in the coming years, particularly where the DGS has not yet reached the target level of 0.8 % of AFM to covered deposits.

The EBA has also introduced new visualization tools (such as dynamic charts and tables) for each of the EEA DGS with the aim to improve and facilitate the understanding and analyse by the public of DGSs’ main metrics, such as variations over time of AFM amounts held by the DGSs.

Legal basis and background
  • The EBA is collecting DGS data in accordance with Article 10(10) of the DGSD. With its Decision EBA/DC/2018/243 from 23 July 2018, the EBA explained that it will make these data publicly available on its website.
  • In support of the DGSD, the EBA published in December 2021 the Guidelines EBA/GL/2021/17 on the delineation and reporting of AFMs of the DGSs and, thus, expanded the reporting requirements from DGSs to the EBA.