[ParlTrack]

Proposal for a directive
Recital 10

(10) Institutional protection schemes are defined in Article 80(8) of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of business of credit institutions (recast)17 and may be recognized as Deposit Guarantee Schemes by the competent authorities if they fulfil all criteria laid down in that Article and in this Directive. Liabilities of Institutional Protection Schemes, or equivalent, should be fully recognised in the prudential requirements of the guaranteeing institution.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Recital 20 a (new)

(20 a) (21) Member States shall establish rules for ex-ante or ex-post funding or a combination thereof and such rules shall take account of the capitalisation base of the banks covered by the scheme with higher ex-post funding allowed when there is a larger capital base.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Recital 24 a (new)

(24a) It is noted that profitability has in some instances been used as a risk diminishing indicator for risk based premiums. This does not take account of the business model of mutuals which do not seek to be profit maximising. Further, motivation to drive up profit can create a perverse incentive towards adoption of riskier strategies. A holistic view of soundness of business model should be taken into account.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Recital 38 a (new)

(38a) Scheme funds may be used to finance the continuity of account operation for an institution's share of covered deposits

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 2 – paragraph 1 – point i

(i) ‘available financial means’ means cash, deposits and low-risk assets with a residual term to final maturity of 24 months or less, which can be liquidated within a time limit not exceeding the limit set by Article 7(1) and all other callable guarantees or loans;

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 4 – paragraph 1 – point j

(j) deposits by ~~authorities,~~small local authorities that do not routinely employ a professional treasurer

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 5 – paragraph 2 – point a

(a) deposits resulting from real estate transactions for private residential purposes for up to 126 months after the amount has been credited; or from when such deposits become legally transferable.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 5 – paragraph 2 – point b

(b) deposits that fulfil social considerations defined in national law and are linked to particular life events such as marriage, divorce, invalidity or decease of a depositor. The coverage shall not exceed a time period of 126 months after such event or from when such deposits become legally transferable.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 6 – paragraph 7 a (new)

7a. Aggregation of deposits for different brands from the same credit institution shall not apply cross boarder.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 6 – paragraph 7 b (new)

7b. Member States may provide that aggregation of deposits for different brands shall not apply within their own Member State.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 6 – paragraph 7 c (new)

7c. Where aggregation of deposits can take place across brands, this information shall be clearly indicated together with the names of the other brands when accounts are opened and on statements of accounts.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 7 – paragraph 1 – subparagraph 1 a (new)

Member States can have a time limit for payout of 20 working days until 31st December 2016. After that date, the time limit for payout should be 5 working days.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 1 – subparagraph 1

Member States shall ensure that Deposit Guarantee Schemes have in place adequate systems to determine their potential liabilities. The available financial means of Deposit Guarantee Schemes shall be proportionate to these liabilities. Member States may implement schemes that are funded ex-ante, ex-post or by a combination thereof, provided that full ex-post funding shall only be permitted when the average capital base in a Member State is above a threshold to be determined by the EBA.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 1 – subparagraph 2

Deposit Guarantee Schemes shall raise the available financial means by ~~regular~~1) annual or more frequent contributions from their members ~~on 30 June and 30 December of each year.~~2) a system of ex-post funding subject to EBA rules on capital adequacy 3) a combination of the above This shall not prevent additional financing from other sources. One-off entry fees may not be requested.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 1 – subparagraph 3

The available financial means shall at least reach the target level. Where the financing capacity falls short of the target level, the payment of contributions shall resume at least until the target level is reached again. Where the available financial means amount to less than two thirds of the target level, the regular contribution shall not be less than 0.25% of eligible deposits.deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 2

2. The cumulated amount of deposits and investments of a scheme related to a single body shall not exceed 5% of its available financial means. Companies which are included in the same group for the purposes of consolidated accounts, as defined in Directive 83/349/EEC or in accordance with recognised international accounting rules, shall be regarded as a single body for the purpose of calculating this limit.deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 3

3. If the available financial means of a Deposit Guarantee Scheme are insufficient to repay depositors when deposits become unavailable, its members shall pay extraordinary contributions not exceeding 0.5% of their eligible deposits per calendar year. That payment shall be executed one day before the time limit referred to in Article 7(1).deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 4

4. The cumulated amount of contributions referred to paragraphs 1 and 2 may not exceed 1% of eligible deposits per calendar year. The competent authorities may entirely or partially exempt a credit institution from the obligation referred to in paragraph 2 if the sum of payments referred to in paragraphs 1 and 2 would jeopardize the settlement of claims of other creditors against it. Such exemption shall not be granted for a longer period than 6 months but may be renewed on request of the credit institution.deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 5 – subparagraph 1

~~The financial means referred to in paragraphs 1, 2 and 3 of this Article shall principally be used in order to repay depositors pursuant to this Directive.~~deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 5 – subparagraph 2

They may however also be used in order to finance the transfer of deposits to another credit institution, provided that the costs borne by the Deposit Guarantee Scheme do not exceed the amount of covered deposits at the credit institution concerned. In this case, the Deposit Guarantee Scheme shall, within one month from the transfer of deposits, submit a report to the European Banking Authority proving that the limit referred to above was not exceeded.Member States may allow Deposit Guarantee Schemes to use the share of the fund that covers a credit institution for financing the use of resolution mechanisms and continuity of service provision, including transfer of deposits to another credit institution, up to the net cost of compensating depositors of that failed institution

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 5 – subparagraph 3 – introductory part

Member States may allow Deposit Guarantee Schemes to use their financial means in order to avoid a bank failure without being restricted to financing the transfer of deposits to another credit institution, provided that the following conditions are met: (a) a scheme's financial means exceed 1% of eligible deposits after such measure; (b) the Deposit Guarantee Scheme, within one month from its decision to take such measure, submits a report to the European Banking Authority proving that the limit referred to above was not exceeded.deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 5 – subparagraph 4

On a case by case basis and subject to authorisation by the competent authorities following a reasoned request by the Deposit Guarantee Scheme concerned, the percentage referred to in (a) may be set between 0,75 and 1 %.deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 9 – paragraph 7

7. Member States shall monthly inform the European Banking Authority of the amount of eligible deposits and covered deposits in their Member State and of the amount of the available financial means of their Deposit Guarantee Schemes. This information shall be confirmed by the competent authorities and shall, accompanied by this confirmation, transmitted within 10 days from the end of each month to the European Banking Authority. Member States shall ensure that the information referred to in the first subparagraph is published on the web-site of the Deposit Guarantee Schemes at least on an annual basis.deleted

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Article 11 – paragraph 2 a (new)

2a. Powers are delegated to the Commission to amend the composite score and sub scores for core and supplementary indicators in Annex 1 and the indicators, ratio, definitions, scores and risk weight coefficients in Annex II Parts A & B. Regulatory Technical Standards shall be adopted in accordance with the EBA regulation. The European Banking Authority may develop draft Regulatory Technical Standards for submission to the Commission.

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Annex 2 – Part A

Core indicators 1. The following core indicators shall be used for calculating risk-based contributions: Risk class Indicator Ratio Own funds items referred to in Article 57 Capital (a) to (ca) of Directive 2006/48/EC and Own funds adequacy risk-weighted assets referred to under ~~Article 76 of Directive 2006/48/EC~~ Risk weighted asssets Article 76 of Directive 2006/48/EC Non performing loans Asset quality Non-performing loans Gross loans ~~Net income Profitability Return on assets Average total assets~~ Liquidity To be determined by Member States subject to Article 11(4) 2. The following scores shall be used in order to reflect risk profiles with regard to core indicators: Risk level Capital adequacy Asset quality ~~Profitability~~ Liquidity Very low risk 1 1 1 1 Low risk 2 2 2 2 Medium risk 3 3 3 3 High risk 4 4 4 4 Very high risk 5 5 5 5 3. The following scores shall be assigned to a member based on actual values of the indicators in a given risk class: Symbol ρ =1 ρ =2 ρ =3 ρ =4 ρ =5 x x x x x Element (x) Capital adequacy CA x > 12.3% 12.3% ≥ x > 9.6% 9.6% ≥ x > 8.2% 8.2% ≥ x > 7% x ≤ 7% Asset quality AQ x ≤ 1% 1% < x ≤ 2.1% 2.1% < x ≤ 3.7% 3.7% < x ≤ 6% x > 6% ~~Profitability~~ P ~~x > 1.2% 1.2% ≥ x > 0.9% 0.9% ≥ x > 0.7% 0.7% ≥ x > 0.5% x ≤ 0.5%~~ ρ subject to Article 11(4) x x Liquidity L Member States may determine the thresholds for each 4. The following risk weights (coefficients) shall be assigned to a member depending on its composite score: Composite score (ρ) 1 < ρ ≤ 1.5 1.5 < ρ ≤ 2.5 2.5 < ρ ≤ 3.5 3.5 < ρ ≤ 4.5 4.5 < ρ ≤ 5 Risk coefficient (β) 75% 100% 125% 150% 200%

2011/04/05
Committee: ECON

Sharon BOWLES

Proposal for a directive
Annex 2 – Part A

Supplementary indicators 1. Member States shall determine supplementary indicators for calculating risk-based contributions. Some or all of the following indicators may be used for this purpose: Risk class Indicator / ratio Definition Total capital Total capital Risk weighted assets Capital adequacy Excess capital Excess capital Excess capital * or or Total assets Risk weighted assets Loan loss provision Loan loss provision Loan loss provision or or Net interest revenue Operating income Asset quality Risk weighted assets Risk weighted assets Total assets Operating expenses Costs to income Operating income Profitability Net margin Net margin Total capital Liquidity To be determined by Member States subject to Article 11(5) * Excess capital = Capital – own funds referred to in Article 57 (a) to (h) of Directive 2006/48/EC. 2. The following scores shall be used in order to reflect risk profiles with regard to supplementary indicators. Risk level Capital adequacy Asset quality ~~Profitability~~ Liquidity Very low risk ~~1 1~~ 1 1 1 1 Low risk 2 2 2 2 2 2 Medium risk 3 3 3 3 3 3 High risk 4 4 4 4 4 4 Very high risk 5 5 5 5 5 5 3. The following risk weights (coefficients) shall be assigned to a member depending on its composite score: Composite score (ρ) 1 < ρ ≤ 1.5 1.5 < ρ ≤ 2.5 2.5 < ρ ≤ 3.5 3.5 < ρ ≤ 4.5 4.5 < ρ ≤ 5 Risk coefficient (β) ~~75%~~ 75% 100% 125% ~~150%~~ 150% 200%

2011/04/05
Committee: ECON

26 Amendments of Sharon BOWLES related to 2010/0207(COD)

ParlTrack - 2011-2024