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New legislation on deposit guarantee schemes and the resolution of credit and other institutions
Area(s) of Practice: Banking and Secured Financing

New legislation (law and regulations) on deposit guarantee schemes (DGSs) and the resolution of credit and other institutions has been approved by the Parliament. The new legislation repeals and replaces the Deposit Guarantee Schemes and the Resolution of Credit and Other Institutions Law of 2013, in line with EU Directive 2014/49 and certain provisions of EU Directive 2014/59.

The main provisions of the new legislation are as follows:
• The covered deposits shall be guaranteed by the DGS, which shall ensure that the repayable amount is available within seven working days.
• The law ensures that the protection of deposits serving certain social purposes is higher than EUR 100,000 for a given period.
• It is ensured that depositors benefit from the same coverage level and scope of protection in every EU member state.
• The law provides for the cooperation between DGSs within the EU.
• The Resolution Fund shall be under the management of the DGS.
• The law ensures that the DGS has in place adequate systems to determine its potential liability. By July 2024, the available financial means of the DGS shall at least reach a target level of 0,8% of the amount of the covered deposits of its members.
• The contributions shall depend on the covered deposits and the risk profile of credit institutions.

Further to the above, the Regulations contain provisions on the participation in the DGS, the definition of covered and eligible deposits, the coverage level and the scope of the protection, the procedure on the activation of the Scheme and administrative provisions on the functioning of the Scheme’s Management Committee.

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