The EU market on structured deposits is limited in size, concentrated in only a few Member States, and offers products with varying net returns, the EBA Report finds.

The European Banking Authority (EBA) today published a Report on structured deposits in the European Union (EU), under the Markets for Financial Instruments Regulation (MiFIR) to monitor this particular market segment. The Report finds that in more than half of the 27 national markets in the EU, structured deposits do not exist, and that the EU market remains very small at an aggregate level, with only €16.7 billion of structured deposits sold between 1 January and 30 September 2023 – the reference period of the Report -, and 95% of which was concentrated in only 4 EU Member States.

These 4 EU Member States were also the few jurisdictions for which increases in the number of products offered and volumes sold were reported, albeit at a very low level. Across the EU, the total value of structured deposits sold in a given Member State ranges from €2 million to €10 billion, showing a disparity in market penetration and investor interest.

The Report also measures the cost and past performance of structured deposits, in response to a request from the EU Commission to report this information. The limited performance data available indicates that the annual net returns for structured deposits vary significantly, with some structured deposits offering no return, while others showing positive returns, in one case up to 24%.

The Report also confirms an observation the EBA had made previously when it carried out a similar exercise whose findings were published in 2019, which is that robust data on national markets for structured deposits is difficult to obtain due to their specific characteristics. In particular, structured deposits, unlike most financial instruments are non-transferable agreements between the provider and the depositor, which makes them less liquid. In addition, information about these products is less accessible to the public.

Background and Legal Basis

Articles 39(2) and 41(1) of MiFIR mandate the EBA to monitor the market for structured deposits and to temporarily prohibit or restrict the marketing, distribution or sale of structured deposits. In addition, the European Commission has requested that the EBA issues recurrent reports on the cost and past performance of structured deposits.

With this Report, the EBA fulfils its mandate under MiFIR and the European Commission’s request.

Similar to the EBA 2019 Report, this Report describes the typical features of structured deposits, the disclosure and reporting requirements, and data sources. It assesses national markets for structured deposits, including their size, cost and past performance and provides an overview of the risks to investors as well as of supervisory activities taken by national competent authorities. The Report also outlines measures the EBA could put in place to improve potential future iterations of this assessment.