EBA欧洲银行-EBA-Opinion-on-deposit-protection-issues-stemming-from-the-withdrawl-of-the-UK-from-the-EU_7页_243kb

EBA Opinion on Deposit Protection Issues Stemming from the UK's Withdrawal from the EU

Core Content

This opinion, issued by the European Banking Authority (EBA) on 28 February 2019, addresses the implications of the United Kingdom's withdrawal from the European Union (EU) on deposit protection for UK credit institutions' branches located in the EU and vice versa. It aims to ensure that depositors are adequately protected and informed about potential changes in the deposit guarantee schemes (DGSs) following the UK's exit.

Main Objectives

The EBA's opinion is based on its legal competence under Article 29(1)(a) of Regulation (EU) No 1093/2010 and serves to:

• Promote a consistent approach to deposit guarantees across the EU.
• Ensure the stability and effectiveness of the financial system.
• Foster depositors' protection and harmonise the application of the Deposit Guarantee Schemes Directive (DGSD) across the Union.

Key Issues Addressed

1. UK's Withdrawal from the EU

• The UK notified the European Council of its intention to withdraw from the EU on 29 March 2017.
• The withdrawal is scheduled to take effect on 30 March 2019, unless a withdrawal agreement is reached.
• Once the UK leaves the EU, its branches in the EU will become third-country branches, and the DGSD will no longer apply to them.

2. Equivalence of Protection

• Article 15(1) of the DGSD requires Member States to check that branches of UK credit institutions in the EU have equivalent protection.
• If the UK does not provide equivalent protection, these branches should be required to join a local (EU) DGS.
• The EBA assumes that the UK will not provide equivalent protection and recommends that Member States take this into account.

3. Depositor Information

• The DGSD mandates that credit institutions inform depositors about their DGS membership.
• The EBA recommends that competent authorities ensure depositors are informed about any changes in DGS affiliation at least one month before the end of their current coverage.
• In cases where the DGS affiliation is not yet known, depositors should be informed as soon as possible, with a maximum of one month before the UK's withdrawal.
• A depositor information template should be provided to depositors, in clear and plain language, including contact details for further assistance.

4. Withdrawal and Transfer of Deposits

• Depositors should be allowed to withdraw or transfer their eligible deposits without penalty if they are no longer protected by a DGS.
• The EBA recommends that competent authorities ensure this process is smooth and transparent.

5. Transfers of DGS Contributions

• If a credit institution changes its DGS affiliation before the UK's withdrawal, the new DGS should receive the transfer of contributions from the previous 12-month period.
• If the change occurs after the UK's withdrawal, no transfer will be required, as DGSD provisions no longer apply.

Coverage of EEA Institutions in the UK

• The UK's Bank of England proposed that EEA credit institutions' branches in the UK should join the UK DGS.
• This could result in double coverage, where branches are protected by both the UK DGS and an EU DGS.
• Double coverage may lead to challenges such as confusion among depositors, unclear liabilities, and increased costs for IT adjustments.

Recommendations

• Competent authorities should proactively engage with UK credit institutions to ensure timely membership in local DGSs.
• Credit institutions should be required to inform depositors and relevant authorities about their communication with customers.
• EU DGSs should publish clear press releases explaining changes in DGS affiliation and their impact on depositors.
• All communication should be in plain language and in the language agreed upon by the depositor and the institution, or the official language of the Member State.

Conclusion

This opinion provides a framework for handling deposit protection issues arising from the UK's withdrawal from the EU, focusing on ensuring equivalent protection, clear communication, and smooth transition of coverage. It is addressed to competent authorities and aims to support the continuity of deposit protection for all depositors.