The Role of Deposit Guarantee Schemes (DGSS) in Resolution Financing

36 Pages Posted: 29 Mar 2019

See all articles by Christos Gortsos

Christos Gortsos

National and Kapodistrian University of Athens

Date Written: March 28, 2019

Abstract

Even though the primary function of deposit guarantee schemes (DGSs) is to serve as ‘paybox’ for bank depositors, provide protection to retail depositors, act as a buffer in the event of a banking crisis and contribute to safeguarding the stability of the banking system, DGSs’ financial means may also be used in order to contribute to the financing of bank resolution, where the conditions for resolution are met. The main focus of the present study, structured in four Sections, is to discuss the existing EU rules governing the role of national DGSs in resolution financing under the Deposit Guarantee Schemes Directive (DGSD) and the Bank Recovery and Resolution Directive of the European Parliament and of the Council (BRRD). The role of the European Deposit Insurance Scheme (EDIS) and the Deposit Insurance Fund (DIF) (only for the Member States participating in the Single Supervisory Mechanism (SSM)) in resolution financing on the basis of the Commission’s (still pending) proposal for a Regulation is also briefly presented. Finally, the study addresses the existing asymmetries in the overall structure of the current and the upcoming system of EU banking law pertaining to the ‘contribution to resolution financing’ function of DGSs, and concludes with a modest proposal to overcome them.

JEL Classification: E50, E53, E58, G01, G21, G28, G33, K23, K33, N20, N24

Suggested Citation

Gortsos, Christos, The Role of Deposit Guarantee Schemes (DGSS) in Resolution Financing (March 28, 2019). European Banking Institute Working Paper Series 2019 – no. 37, Available at SSRN: https://ssrn.com/abstract=3361750 or http://dx.doi.org/10.2139/ssrn.3361750

Christos Gortsos (Contact Author)

National and Kapodistrian University of Athens ( email )

Akadimias 45
Athens, 10672
Greece

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