Abstract
The European Union imposed strict rules to its member countries on funding and the use of DIS’ funds for the purpose of financing deposit payout and bank resolution. The DGSD (Directive 2014/49/EU) prescribes maximum harmonization on the creation of the ex ante DIF at a minimum of 0.8 per cent of covered deposits by mid-2024 through the collection of regular risk-based annual premium from the banks. The use of the DIS’ funds is limited onto payout of depositors and financing bank resolution whereas, conditionally, DIS’ funds may be used for alternative measures in order to prevent bank failure.
This chapter provides examples how to use DIS’ funds in a challenging situation when a DIS faces insufficient liquidity. It discusses use of DIS’ funds for alternative measures under the state aid rules and explains rules on a mutual borrowing between two or more national deposit insurance schemes on a voluntary basis.
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Ognjenovic, D. (2017). Funding Deposit Insurance Schemes in the European Union. In: Deposit Insurance Schemes. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-51143-6_7
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DOI: https://doi.org/10.1007/978-3-319-51143-6_7
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