When establishing or acquiring a bank in Germany, a regulatory business plan must be provided to the German Federal Financial Supervisory Authority which contains, amongst other things, the expected costs. These costs include the mandatory contribution payments to the German deposit guarantee scheme Entschädigungseinrichtung deutscher Banken GmbH (EdB).
As of recently, the contributions to the EdB (these include non-recurring/one-off payments, annual contributions, special contributions, special payments) are no longer calculated according to the Deposit Guarantee Scheme and Investor Compensation Act (Einlagensicherungs- und Anlegerentschädigungsgesetz – EAEG) in conjunction with the EdB contributions regulation (EdB-Beitragsverordnung – EdBBeitrV). As part of the implementation of the Directive 2014/49/EU of the European Parliament and Council of 16 April 2014 on deposit guarantee schemes (DGDS), the previous Deposit Guarantee Scheme and Investor Compensation Act was “split” into the Deposit Guarantee Scheme Act (Einlagensicherungsgesetz – EinSiG) and Investor Compensation Act (Anlegerentschädigungsgesetz – AnlEntG). The Investor Compensation Act secures the liabilities from securities transactions whereas the Deposit Guarantee Scheme Act (EinSiG) secures the deposits.
The contributions of the CRR credit institutions are now calculated according to the EinSiG in conjunction with a new contributions regulation yet to be released which will contain the specific calculation methods (like the previous EdB contributions regulation). The general contribution model consisting of annual contributions, non-recurring/one-off payments, special contributions and special payments shall remain unchanged however.
A transitional regulation applies to the annual contributions for the calculation period 2014/2015 (1 October 2014 to 30 September 2015) which shall still be calculated according to the previous provisions.
In order to ensure consistent application of the DGDS, the European Banking Authority (EBA) was supposed to issue guidelines to specify methods for calculating the contributions to deposit guarantee schemes. Accordingly, on 28 May 2015, the EBA issued Guidelines on methods for calculating contributions to deposit guarantee schemes (EBA/GL/2015/10). They recommend specific and in detail the methods to be used for calculating the annual contributions. It remains to be seen how the expected contributions regulation will look like. However, considering the implementation history, it can be expected that the new EdB contributions regulation will mostly adopt these guidelines.
The guidelines recommend the calculation of the annual contributions of an institution which is a member of the deposit guarantee scheme according the following formula:
Annual contribution of a member institution = Contribution rate x Aggregated risk weight for member institution x Covered deposits for member institution x Adjustment coefficient
There is the possibility that the annual contributions will be higher in the future. Furthermore, it is unclear how the non-recurring/one-off payment, which is mandatory when being allocated to the EdB, will be calculated. This payment could also be higher in the future.
The deposit guarantee schemes, including the EdB, shall reach a target level of 0,8 % of the amount of the covered deposits of its members.
As soon as the new contributions regulation is available, we will provide you with an update here so that you will be able to determine the amount of the contributions for the target figures in the regulatory business plan.