European Banking and Financial Law by Matthias Haentjens Pierre de Gioia-Carabellese & Pierre de Gioia-Carabellese

Author:Matthias Haentjens,Pierre de Gioia-Carabellese & Pierre de Gioia-Carabellese [Matthias Haentjens]
Language: eng
Format: epub
ISBN: 9781317483069
Publisher: Taylor & Francis Ltd

7.2.2.3 The beneficiary

The beneficiary of the scheme, from the EU legislator’s perspective, does not involve any bank costumer, but rather the holder of a ‘deposit’, i.e. a deposit shall mean:

a credit balance which results from funds left in an account or from temporary situations deriving from normal banking transactions and which a credit institution is required to repay under the legal and contractual conditions applicable, including a fixed term deposit and a savings deposit.86

Not every depositor is expected – or indeed entitled – to be protected in accordance with the principles underpinning the EU Directives, rather exclusively ‘eligible deposits’, i.e. ‘deposits that are not excluded from protection pursuant to Article 5’ of the DGS Directive. The underlying philosophy renders the coverage applicable exclusively to the retail depositor who may subsequently lodge a claim with the scheme in place. As a result, categories of depositors such as ‘financial institutions’, ‘insurance undertakings’ or central and local authorities are ‘excluded’ from the safety net of EU legislation and, therefore, are unprotected by national statute also.87

Finally, the coverage threshold of Euro 100,000 relates to ‘aggregate deposits’ for each depositor, rather than for an individual deposit.88 The obvious consequence being that the depositor will be unable to cherry-pick from two (or more) different deposits, amounting to as much as Euro 100,000 with the same financial institution. If a depositor really intended to minimise the risk, he would spread the risk among a range of institutions, rather than employing multiple deposits with a single bank. The tenor of the DGS Directive remains unclear, however, over whether the limit applies to each bank or each banking group. As the EU legislation specifically refers to credit institutions, it is possible to infer that the protection level remains intact irrespective of the existence of a banking group.89

The actual modalities, whereby the depositor may reclaim his money, are subject to the details of the scheme existing in that country. Usually, at national level, all authorised schemes are hinged on bylaws and regulations stipulating the detailed guidelines to be adopted. Despite this, the EU legislator takes pains to spell out the general principles which, as a matter of course, every scheme must comply with.

The reliability of a ‘protection scheme’ is also dependent on the speed with which the depositor’s claim is settled, subsequent to the default of a financial institution. It is no coincidence that the DGS Directive, in this respect, has been increasingly generous to the depositor. Most recently, the DGS Directive has reduced the time limit even further to ‘seven working days of the date on which a relevant administrative authority makes a determination . . . or a judicial authority makes a ruling’ in respect of that specific credit institution.90 Furthermore, under the new DGS Directive, a postponement, which shall not exceed three months, is granted exclusively in regard to depositors ‘not absolutely entitled to the sums held in an account’.91

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.