The Minister for Finance has passed the EU (Deposit Guarantee Schemes) Regulations 2015 (the Regulations) implementing the Deposit Guarantee Scheme Directive in Ireland. The Regulations appoint the Central Bank as the designated authority and provide for the establishment of a fund for the financing of a deposit guarantee scheme. The Central Bank is required to conduct stress tests, levy contributions to the fund from members of the deposit guarantee scheme, report to the EBA and assess the equivalence of 3rd country institutions' depositor protection. The Regulations set out rules in relation to the eligibility of deposits, cover levels (currently of up to €100K per eligible depositor), administration of the scheme and the provision of information to depositors.
Separately, the European Commission has published a legislative proposal which envisages the establishment of a European Deposit Insurance Scheme (EDIS) as the third pillar of the Banking Union. The proposal envisages three successive stages:
- a reinsurance scheme for participating national DGSs in a first period of three years;
- a co-insurance scheme for participating national DGSs in a second period of four years; and
- full insurance for participating national DGSs in the steady state.
A national DGS would only benefit from EDIS if its funds are being built up in line with a precise funding path and it otherwise complies with essential requirements under Union law. The Single Resolution Board, which would be expanded to administer EDIS, would monitor national DGSs and release funds only where clearly defined conditions are met. The introduction of EDIS would be accompanied by ambitious measures in parallel to reduce risks in the banking sectors of Member States.