Changes from report parliamentary committee draft to plenary report

Added(c) the marketing is free from any conflict of interest;

Added(d) the marketing takes account of the need to implement a rapid solution taking into account the deadline laid down in Article 3(2), second subparagraph, for the determination referred to in Article 2(1), point (8)(a);

Added(e) the marketing aims at maximising, as much as possible, the sale price for the assets, rights and liabilities concerned.

Added1a. Member States shall ensure that, where the DGS is used in accordance with Article 11(5) with respect to a credit institution, and provided that such action ensures that natural persons and micro, small and medium-sized enterprises continue to have access to their deposits, to prevent them from bearing losses, the DGS to which that credit institution is affiliated shall contribute the following amounts:

Added(i) the amount necessary to cover the difference between the value of the covered deposits and of the liabilities with the same or a higher priority ranking, and the total value of the assets which are to be transferred to a recipient; and

Added(ii) where relevant, an amount necessary to ensure the capital neutrality of the recipient following the transfer.

Added‘Article 11e

AddedLeast cost test

Added1. When considering the use of DGS funds for the measures referred to in Article 11(2), (3) or (5), Member States shall ensure that DGSs make a comparison of the following:

Added(a) the estimated cost for the DGS to finance the measures referred to in Article 11 (2), (3) or (5);

Added(b) the estimated cost of repaying depositors in accordance with Article 8(1).

Added2. For the comparison referred to in paragraph 1, the following shall apply:

Added(a) for the estimation of the costs referred to in paragraph 1, point (a), the DGS shall take into account the expected earnings, operational expenses and potential losses related to the measure;

Added(b) for the measures referred to in Article 11(2) and (5), the DGS shall base its estimation of the cost of repaying depositors, as referred to in paragraph 1, point (b), on the valuation of the credit institution’s assets and liabilities referred to in Article 36(1) of Directive 2014/59/EU and the estimate referred to in Article 36(8) of that Directive;

Added(c) for the measures referred to in Article 11(2), (3) and (5), when estimating the cost of repaying depositors, as referred to in paragraph 1, point (b), the DGS shall take into account the expected ratio of recoveries, ▌ the potential additional cost of funding for the DGS and the possible cost for the DGS arising from potential economic and financial instability, including the need to use additional funds, within the DGS mandate, to protect depositors and financial stability, and to prevent contagion;

Added(d) for the measures referred to in Article 11(3), when estimating the cost of repaying depositors, the DGS shall multiply the estimated ratio of recoveries calculated in accordance with the methodology referred to in paragraph 5, point b, by 85 %.

Added3. Member States shall ensure that the amount used to finance the resolution of credit institutions, as referred to in Article 11(2), for the preventive measures referred to in Article 11(3), or for the alternative measures referred to in Article 11(5), does not exceed the amount of covered deposits at the credit institution.

Added4. Member States shall ensure that the competent and resolution authorities provide the DGS with all information necessary for the comparison referred to in paragraph 1. Member States shall ensure that the resolution authority provides the DGS with the estimated cost of the DGS contribution to resolution of a credit institution as referred to in Article 11(2).

Added4a. As soon as possible after performing alternative measures, Member States shall ensure that the DGS shares with the competent authority, the resolution authority and the designated authority a summary of the core elements of the calculation made pursuant to this Article. That summary shall in particular comprise the net recovery rate derived from the estimated cost of repaying depositors for the DGS and a broad justification of the related underlying assumptions.

Added5. The EBA, taking into account the regulatory technical standards adopted pursuant to Article 36(16) of Directive 2014/59/EU, shall develop draft regulatory technical standards to specify:

Added(a) the methodology for the calculation of the estimated cost referred to in paragraph 1, point (a), which shall take into account the specific features of the measure concerned;

Added(b) the methodology for the calculation of the estimated cost of repaying depositors referred to in paragraph 1, point (b), including the expected recoveries referred to in paragraph 2, point (c), the potential additional cost of funding for the DGS and the possible cost for the DGS arising from potential economic and financial instability, including the need to use additional funds, within the DGS mandate, to protect depositors and financial stability, and to prevent contagion;

Added(c) the way to account, in the methodologies referred to in points (a), (b) and (c), where relevant, for the change of value of money due to potential accrued earnings over time.

AddedFor the calculation of the potential additional cost for the DGS referred to in the first subparagraph, point (b), the methodology shall factor in:

Added(a) the administrative costs linked to the process of repayment;

Added(b) the administrative costs of levying contributions pursuant to Article 10(8) should such contributions be needed to repay the depositors, and the costs of mobilising alternative funding arrangements pursuant to Article 10(9) should such arrangements be mobilised.

AddedFor the calculation of the estimated cost of repaying depositors as referred to in paragraph 1, point (b), in the case of ▌measures referred to in Article 11(2), (3) or (5), the methodology referred to in point (b) shall take into account contagion effects, economic and financial risks and any reputational damages for the banking system, including, where relevant, the protection of the joint trademark, and the importance of preventive measures for the statutory or contractual mandate of the DGS, including IPS referred to in Article 1(2), point (c).

AddedThe EBA shall submit those draft regulatory technical standards to the Commission by …[OP – please insert the date= 12 months after the date of entry into force of this Directive].

AddedPower is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Added(13a) Article 13 is replaced by the following:

Added‘1. The contributions to DGSs referred to in Article 10 shall be based on the amount of covered deposits and the degree of risk incurred by the respective members of any single DGS.

AddedMember States may provide for lower contributions for low-risk sectors of credit institutions affiliated to a DGS which are regulated under national law.

AddedMember States may decide that members of an IPS pay lower contributions to the DGS.

AddedMember States may allow the central body and all credit institutions permanently affiliated to the central body as referred to in Article 10(1) of Regulation (EU) No 575/2013 to be subject as a whole to the risk weight determined for the central body and its affiliated institutions on a consolidated basis.

AddedMember States may decide that credit institutions pay a minimum contribution, irrespective of the amount of their covered deposits.

Added2. DGSs may use their own risk-based methods for determining and calculating the risk-based contributions by their members. The calculation of contributions shall be proportional to the risk of the members and shall take due account of the risk profiles of the various business models. Those methods may also take into account the asset side of the balance sheet and risk indicators, such as capital adequacy, asset quality and liquidity.

AddedEach method shall be approved by the competent authority in cooperation with the designated authority. EBA shall be informed of the methods approved.

Added3. In order to ensure the consistent application of this Directive, EBA shall develop draft regulatory technical standards to specify methods for calculating the contributions to DGSs in accordance with paragraphs 1 and 2 of this Article.

AddedEBA shall submit those draft regulatory technical standards to the Commission by … [12 months from the date of entry into force of this amending Directive].

AddedPower is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Added(14) Article 14 is amended as follows:

Added(a) paragraph 1 is replaced by the following:

Added‘1. Member States shall ensure that DGSs cover the depositors at branches set up by their member credit institutions in other Member States and depositors located in Member States where their member credit institutions exercise the freedom to provide services as referred to in Title V, Chapter 3, of Directive 2013/36/EU.’;

Added(b) in paragraph 2, the following subparagraph is added:

Added‘By way of derogation from the first subparagraph, Member States shall ensure that a DGS of the home Member State may decide to repay depositors at branches directly where all of the following applies:

Added(i) the administrative burden and cost of such repayment is lower than the repayment by a DGS of the host Member State;

Added(ii) the DGS of the home Member State ensures that the depositors are not worse off than where the reimbursement would have been conducted in accordance with the first subparagraph;

Added(iia) the repayment is made in the same currency as it would have been if the reimbursement had been conducted in accordance with the first subparagraph.’;

Added(c) the following paragraphs 2a and 2b are inserted:

Added‘2a. Member States shall ensure that a DGS of a host Member State may, subject to an agreement with a DGS of a home Member State, act as the point of contact for depositors at credit institutions that exercise the freedom to provide services as referred to in Title V, Chapter 3, of Directive 2013/36/EU, and shall be compensated for the costs incurred.

Added2b. In the cases referred to in paragraphs 2 and 2a, Member States shall ensure that the DGS of the home Member State and the DGS of the host Member State concerned have an agreement in place on the payout terms and conditions, including on the compensation of any costs incurred, the contact point for depositors, the timeline and the payment method. The DGS of a home Member State shall provide the DGS of the host Member State with information on the number of depositors, the amount of covered deposits and possible relevant changes thereto.’;

Added(d) paragraph 3 is replaced by the following:

Added‘3. Member States shall ensure that where a credit institution ceases to be member of a DGS and joins a DGS of another Member State, or if some of the credit institution’s activities are transferred to a DGS of another Member State, the DGS of origin shall transfer to the receiving DGS an amount that reflects the additional potential liabilities borne by the receiving DGS as a result of the transfer, taking into account the impact of the transfer on the financial situation of both the receiving DGS and the DGS of origins relative to the risks they cover. ▌

AddedEBA shall develop draft regulatory technical standards to specify the methodology for the calculation of the amount to be transferred to ensure a neutral impact of the transfer on the financial situation of both DGSs relative to the risks they cover.

AddedEBA shall submit those draft regulatory technical standards to the Commission by ... [12 months from the date of entry into force of this amending Directive].

AddedPower is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the second subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council.’;

Added(e) the following paragraph 3a is inserted:

Added‘3a. For the purposes of paragraph 3, Member States shall ensure that the DGS of origin transfers the amount referred to in that paragraph within 1 month from the change of DGS membership.’;

Added(f) the following paragraph 9 is added:

Added‘9. By ... [24 months from the date of entry into force of this amending Directive], the EBA shall issue guidelines on ▌the respective roles of home and host DGSs as referred to in paragraph 2, ▌including a list of circumstances and conditions under which a DGS of the home Member State ▌reimburses depositors at branches located in another Member State as laid down paragraph 2, third subparagraph.’;