EBA Published Draft Guidelines on Reporting Available Financial Means (AFM) of Deposit Guarantee Schemes

April 28, 2021 -The European Banking Authority (EBA) released a public consultation on draft ‘Guidelines on the delineation and reporting of available financial means (AFM) of Deposit Guarantee Schemes (DGSs)’. The new draft requirements aim to ensure that only funds contributed by credit institutions, or that stem indirectly from such contributions as recoveries or investment income, will count towards reaching the target level of the DGS fund. On the contrary, funds that stem directly or indirectly from borrowed resources should not count towards the target level. This amendment intends to prevent the situation where a DGS meet the target level by borrowing a loan.

The draft Guidelines are created on the basis of EBA Opinion on deposit guarantee scheme funding and uses of deposit guarantee scheme funds published on 23 January 2020.

The draft Guidelines clarify that AFM are comprised of two subsets: qualified AFM (QAFM), funds stemming directly or indirectly from contributions of DGS member institutions, which qualify towards reaching the target level of the DGS fund and other AFM funds, which are not QAFM, including borrowed funds that stem from liabilities such as loans and hence do not count towards reaching the target level of the DGS fund.

The changes in the proposed Guidelines will broaden the reporting requirements from DGSs to the EBA and also require the reporting on outstanding liabilities of DGSs, unclaimed repayments, and high-level information on alternative funding arrangements. The EBA plans to publish this information annually on the EBA website in order to allow further transparency and comparability of the financial position of DGSs across the EU.

The consultation will be open until 28 July 2021.

For more information please visit: EBA website

Jurisdiction: European Union

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