Revised Rules to Protect Bank Deposits and Boost Cross‑Border Support

Commission communication to the European Parliament (COM(2026) 124)

• Purpose: To inform the Parliament about the Council’s position on a draft directive that amends Directive 2014/49/EU. The draft changes how deposit‑guarantee‑scheme (DGS) funds are used for protecting depositors, cooperating across borders, and ensuring transparency.

• Key dates

• Proposal sent to Parliament and Council: 19 April 2023 (COM(2023) 228).

• European Economic and Social Committee opinion: 13 July 2023.

• Parliament’s first‑reading position: 24 April 2024.

• Council’s adopted position: 5 March 2026.

• Background

• The Commission proposed four amendments to the Crisis Management and Deposit Insurance (CMDI) framework.

• One amendment to Directive 2014/59/EU (minimum own‑funds requirement) was adopted separately as Directive (EU) 2024/1174.

• The other three amendments target Directive 2014/59/EU, Regulation (EU) 806/2014, and Directive 2014/49/EU.

• Objectives of the proposal

• Strengthen financial stability and protect taxpayers’ money.

• Shield the real economy from bank failures.

• Improve crisis‑management tools for smaller and medium‑sized banks.

• Allow resolution authorities to use DGS funds to finance a transfer strategy when a bank’s own loss‑absorbing capacity is insufficient.

• Council’s position (first reading)

• Aligns with the political agreement reached on 25 June 2025.

• Key points:

• DGS funds can be used outside of resolution only if they meet a “least‑cost test” (LCT) that caps the intervention at the gross amount of covered deposits.

• The same LCT applies to DGS funds used for alternative insolvency measures, with additional rules on which transfers can be financed.

• Institutional protection schemes (IPS) recognised as DGS must keep an ex‑ante target level of 0.8 % of covered deposits.

• IPS can temporarily transfer funds to support affiliated institutions’ liquidity and solvency, but must repay within 7 working days if the payout occurs or if the affiliated institution contributes to the resolution of a credit institution linked to the IPS.

• Conclusion

• The Commission supports the Council’s agreed position and accepts it at first reading.