The European Banking Authority (EBA) has called for stronger depositor protection in the EU
It opinion focuses on the payouts by deposit guarantee schemes (DGSs) and offers various changes to the EU legal framework, aimed at bolstering depositor protection, access to information, enhancing financial stability and improving operational effectiveness of DGSs.
The EBA has assessed nine separate topics related to DGS payouts and outlies 30 proposals for improvements.
One of the specific changes is to ensure depositors are not left without access to funds when the decision that deposits have become unavailable has not been made by the authorities. In such instances it believes depositors should have access to an appropriate daily amount of their deposits.
It also covers instances where money laundering and terrorism financing are concerned, including the suspension of payouts to depositors suspected of these.
The opinion also outlines how cooperation between AML authorities and DSGs could improve crackdown on these criminal activities.
Additionally, it recommends changes to the treatment of specific situations such as the treatment of beneficiary accounts and depositors holding deposits over the coverage levels or with banks headquartered in a different member state.
In the document, the EBA clarifies the importance of enhancing depositor protection and informing them of relevant features.
It stated that consumers should be informed of their rights in relation to temporary high balances and the possibility that deposits would be set-off against their liabilities that have fallen due before their deposits had become unavailable.
The opinion has been addressed to the EU Commission on the implementation of the Deposit Guarantee Schemes Directive (DGSD).
Copyright © 2019 FinTech Platform
