European DGSs conclude state of play report on alternatives measures to payout for effective banking crisis solution
A new State of Play and Non-Binding Guidance by the European Forum of Deposit Insurers (EFDI) – a platform bringing together Deposit Guarantee Schemes (DGSs) from all EU Member States and beyond – provides a practitioner-focused contribution to the current EU policy debate on managing small banks’ crisis with tools other than depositor reimbursement. The report combines an analysis of the provisions related to alternative measures for DGSs stipulated by the DGS Directive with specific and practical recommendations to address the issues of exercising those rights, if mandated, by deposit insurers across Europe.
The views expressed in the paper reflect the practical experiences from DGSs across the membership of EFDI, thereby offering a unique practitioner’s’ view to enhance the current deliberations on the overall enhancement of European crisis management framework, including the completion of the Banking Union. Notwithstanding the diverging views with regard to harmonization of insolvency laws, possible broad mandate of DGSs in application of a variety of tools with safeguards to resolve small banks without public interest and the different impediments to effectively use these tools, this joint work has resulted in a consensual document with recommendations on how to remove those obstacles.
In order to make the current crisis management framework more resilient, EFDI stands ready to discuss these insights with its stakeholders in the EU policy discussions.
The full report is available below.