- Question ID
-
2015_2473
- Legal act
- Directive 2014/59/EU (BRRD)
- Topic
- Resolution financing arrangements
- Article
-
109
- Paragraph
-
1
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
-
n/a
- Name of institution / submitter
-
De Nederlandsche Bank
- Country of incorporation / residence
-
Netherlands
- Type of submitter
-
Competent authority
- Subject matter
-
Use of DGS to finance a transfer covered deposits
- Question
-
To what extent can the deposit guarantee scheme (dgs) be used to facilitate a transfer of covered deposits when applying the sale of business tool?
- Background on the question
-
In order to protect covered deposits of a failing institution, the appropriate strategy may entail the transfer of covered deposits to another financial institution (the "purchaser"). Ideally, such a transfer involves an amount of assets corresponding to the liabilities resulting from the covered deposits. However, this may pose a challenge, in particular if the asset of the failing institution are to a large extent illiquid. In that case, a transfer may be facilitated by using dgs funds to ‘balance’ the transaction. In doing so, the purchaser will receive the funds from the dgs and the dgs subsequently will acquire the rights of the depositors vis-á-vis the failing institutions by way of subrogation. This puts the dgs in the same position would it have executed the dgs and compensated the depositors directly (i.e. the dgs will have paid out an amount of compensation equal to the amount of covered deposits and end up with a preferred claim in the same amount against the bankrupt estate of the failing institution).
- Submission date
- Rejected publishing date
-
- Rationale for rejection
-
Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.
If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.
For further information please refer to the press release and the updated Q&A page.
- Status
-
Rejected question