The European Banking Authority has published the second in a series of three opinions on the implementation of the Deposit Guarantee Scheme Directive in the EU. This opinion relates to DGS payouts. The first opinion related to the eligibility of deposits, coverage level and cooperation between deposit guarantee schemes and was published in August 2019. The third opinion will cover DGS funding and the uses of DGS funds. The opinions have been prepared to assist the European Commission in its obligation to report on the implementation of the DGSD.

The EBA recommends the following on the subject of DGS payouts:

• greater clarity on the treatment of depositors who do not have access to deposits that are due and payable but which have not been declared “unavailable” for the purposes of the DGSD, including a provision ensuring that such depositors have access to an appropriate daily amount;
• greater coordination between the DGS and AML regimes, including provision in relevant anti-money laundering legislation for an authority to be appointed in order to instruct a DGS, insolvency practitioner or credit institution (bank) to suspend a payout where there is a suspicion of money laundering or terrorist financing in the claim that is made;
• to cater for situations where a depositor is not absolutely entitled to the sums held in an account, amendment of the DGSD provision governing the deadline for the repayment of beneficiary accounts, linking it to the moment the DGS has received all necessary information to determine the repayable amount for absolutely entitled persons;
• amending the DGSD to provide restricted flexibility for the home DGS to repay depositors at branches in host Member States directly;
• given the increasing growth in passported services, providing further clarity in the DGSD in relation to the treatment of depositors using passported services instead of accessing the services through established branches;
• amendments to the “temporary high balance” regime (covering deposits that are exceptional and of limited duration, usually resulting from major life events), including harmonization of the time limit applicable to temporary high balances at six months and to harmonize the temporary high balance amount at a sufficiently high level; and
• requiring Member States to inform depositors via the depositor information sheet if they intend to implement a requirement that the DGS should take into account the possibility of setting off liabilities fallen due.

The EBA has concluded that it is not necessary to amend existing provisions on the deadline for making a repayable amount available to depositors or the payout method, identification of depositors or the  general procedure for informing depositors during payouts.

View the EBA's opinion.

View details of the EBA's opinion on the eligibility of deposits, coverage level and cooperation between deposit guarantee schemes.

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