The So-Called Pan-European Depositors' Protection Scheme
| DOI | 10.1177/1023263X1602300203 |
| Date | 01 April 2016 |
| Author | Pierre de Gioia-Carabellese,Corrado Chessa |
| Published date | 01 April 2016 |
| Subject Matter | Article |
23 MJ 2 (2016) 241
THE SOCALLED PANEUROPEAN
DEPOSITORS’ PROTECTION SCHEME
A Further Euro Own-Goal?
A Critical Analysis of Directive 2014/49
P G-C* and C C**
ABSTRACT
is article focuses on th e legal provisions of Directive 2014/49 on deposit guarantee schemes
(the DGS Directive) and focuses on how the national schemes nancially support each
another by o ering a critical analysis to demonstrate that the new legal framework is far
from satisfactory. is is because the new ‘safety ne t’, still hinged on depositors’ protections
schemes that operate at the national level, is fettered by the quantitative limits and legal
constraints of mutual borrowing. is ultimately still leaves the EU/EEA depositors with
an element of uncertainty.
is co nt ri bu t io n a ls o s ee k s t o i ll us tr at e t ha t t he re ce nt ma s s w it hd raw al f ro m b an k d ep os it s
in Greece (in June/July 2015) was an unsuccessful test ca se for the new legislation, which
was ironically already in force at the time the crisis unfolded. is case study of Greece is
coupled with the important Landsl aki dictum which is given equal attention in this article .
Together they give signi cant credibility to the view that the DGS Directive, seemingly not
fully aware of the lessons to be learnt from the 2 011Eurozone crisis, is obsolete and should
be amended as soon as possible .
Keywords: depositor’s protection schemes; mutua l borrowing
* Associate Profes sor of Business Law at Heriot Watt Universit y, Edinburgh.
** Associate Profes sor of Private Law at the Universit y of Cagliari.
Pierre de Gioia-Ca rabellese and Cor rado Chessa
242 23 MJ 2 (2016)
§1. IN TRODUC TION
One of the most signi cant pieces of EU legislation passed in recent years within the
domain of banking and nancial law is Directive 2014/49 (DGS Directive).1 e DGS
Directive is concerned with the ‘deposit gua rantee schemes’ and encapsulates a variety
of legal provisions. It contains a more perspicuous de nition of ‘deposit’,2 including
‘repayable deposits’ (current accounts and xed terms/savings deposits)3 and the
consequent exclusion of bonds and other structured products. e interest accrued on
the covered deposit, which is not yet credited when t he credit institution is no longer
in a position to repay the money is nonetheless covered by the g uarantee scheme, as
long as it does not exceed the statutory threshold.4 e deposit guara ntee schemes must
automatically execute the pay ment of the money owed to the depositor within 7 working
days5 without the depositor being obliged to complete a speci c form.6 e new legisl ation
also requires t hat over a ten-year period gua rantee schemes accumulate enough fu nds to
cover their risks vi s-à-vis the protected depositors. More speci cally, the target has been
set in a gure, 0.8% of the eligible deposit liabi lities of that deposit scheme.7
Amongst its most remarkable measu res, the framework at stake u shers in a signi cant
new pr inciple: a pan-Eu ropean system o f protect ion a orded to the bank depositors. e
essence of this new regime, in ful lling the intention of the EU legislature, lies on the
fact that a kind of ha rmonization in the area of depositors’ protection is the object ive to
be achieved.
e novel uniform harmonization is synthesized in Recital 6 of Directive 2014/49:
‘(…) [A] uniform level of protection should be provided for depositors throughout the
Union while ensuring the s ame level of stability of DGSs’.
1 Directive 2014/49/EU of the Europ ean Parliament a nd of the Council of 16 April 2014 on deposit
guarantee s chemes, [2014] OJ L 173/149. e DGS D irective is the outcome of a proc ess started in 2 010,
when the Commi ssion proposed an amende d version of the previous Di rective 1994/19 on deposit-
guarantee s chemes, [1994] OJ L 135/5. e nal text is the result of a pol itical agreement achieve d on
18February 2014 (Europa Rapid Pres s Release, Deposit g uarantee schemes – Cou ncil con rm agreement
with EP, 18Februar y 2014, 6562/2/14 REV 2). It is worth noting t hat, more in general, both the DG S
Directive an d the Directive on t he Financial Crisis (Direct ive 2014/59/EU establishi ng a framework
for the recovery and re solution of credit ins titutions and inve stment rms and amending Council
Directive 82/891/EEC , and Directives 2 001/24/EC, 2002/47/EC, 20 04/25/EC, 2005/56/E C, 2007/36/EC,
2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulat ions (EU) No 1093/2010 and (EU) No 648/2012,
of the European Pa rliament and of the Cou ncil, [2014] OJ L 173/190) are connected and a n integral par t
of a uni ed act ion plan of the EU legisl ator. See, as regards the B ank Recovery a nd Resolution Direct ive,
D. Busch and G. Ferra rini (eds.), European Banking Union (Oxford University Press, 2015).
2 Article2(1)(a) of the DGS.
3 C. Proctor, e Law a nd Practice of Interna tional Banking (2nd ed ition, Oxford University Pr ess, 2015),
p.286.
4 Article6(b) of the D GS.
5 e current 20 working d ays shall be phased out prog ressively by 2019.
6 Article7 of t he DGS.
7 Article9 of t he DGS.
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