Transcript www.feelingeurope.eu

SKATING ON THIN ICE – WHAT DEPOSIT
INSURANCE SCHEME FOR EUROPE?
13 January 2011
Alex Kuczynski
Director – Corporate Affairs
Financial Services Compensation Scheme, UK
Recent European and UK History








1979 Banking Act – UK DGS
1994 Deposit Guarantee Schemes Directive (94/19/EC)
2005 EC Communication
2007 – FSCS removal of co-insurance, increasing the limit to
£35,000
2008 – FSCS increased limit to £50,000
2009 – amending DGS (2009/14/EC)
– Banking Act 2009
2010 – draft amending DGSD
2011 – FSCS increased limit to £85,000 and simplified
process
2009 Amending DGS





€100,000 – maximum harmonisation basis
Temporary increased account balances
Pan EU DGS
Harmonisation of scope of products and
depositors
Link with reimbursing depositors, including
emergency payout
Draft DGS – 12 July 2010





Simplification and harmonisation, in particular scope of
coverage and arrangements for payout
Further reduction of the time limit for payout of
depositors and better access for DGS to information
about their members
Sound and credible DGS that are sufficiently financed
Mutual borrowing between DGS i.e. a borrowing facility
in certain circumstances
Home/host handling of claims/payout
Simplification and Harmonisation






“Deposit”
Eligible depositor – all individuals, all corporates
No set off
Fixed interest return
Currency of payout
Temporary high balances
Time Limit For Payout







3 months – extendable (1994)
20 working days (2009)
7 calendar days? (2010)
Single customer view and account flagging
No application/claim
Trust and beneficiary accounts
Information template
PAN EU DGS/Mutual Borrowing






De Larosiere report
Alternative structures/28th scheme?
Single Pan EU scheme?
Home/Host state’s responsibilities
Mutual borrowing – 0.5%
- EBA role
- repayment in 5 years
- priority in liquidation
Resolution funding
Funding






Ex ante – 1.5% target fund
Ex post – 0.5% contribution
Risk-based levies/differential premiums
Liquidity and access to funds
Investment of funds – limited range
Transitional period – 2020?
Operational Issues and Concerns





Contingency planning/stress testing – access to data
Corporate governance structures – independence
Cross-border cooperation/single point of contact - funding
Speed and access to funds, and currency of payout
Method of payout – cheques, electronic payout, bank
branches, other
Contribution to Financial Stability
 Increased expectations
 Role in consumer confidence and
financial stability
 Resolution funding
Work In Progress
 Revised draft DGSD
 IADI/EFDI/BCBS/IMF Assessment
methodology for the core principles of effective
deposit insurance systems
 EFDI Multilateral Memorandum of
Understanding
 Faster payout workshops
Thank you for listening
Any questions?