The Council of the EU adopted its first-reading position (general approach) on 27 January 2026 on a proposed directive to amend the Deposit Guarantee Schemes (DGS) Directive (2014/49/EU), paving the way for trilogue negotiations with the European Parliament. The reform aims to enhance depositor protection, harmonise DGS functioning, and deepen the Banking Union.
Key policy changes The Council's position extends DGS coverage to deposits of certain non-professional public entities (e.g., local authorities, schools, hospitals) and to funds held by e-money, payment, and investment firms on behalf of identifiable clients. Deposits placed to meet bank resolution requirements (MREL) are excluded. Temporary high balances from life events (e.g., real estate transactions, insurance payouts) receive harmonised protection: a minimum of €500,000 (up to €2.5 million for real estate) for six months, on top of the standard €100,000 guarantee. Payout rules are streamlined, with a 20-working-day deadline for repayments requiring verification, credit transfers as the default for amounts over €10,000, and exemptions for very small dormant balances. Enforcement is strengthened through interest charges for late contributions and improved DGS-competent authority coordination. The EBA is mandated to issue guidelines on DGS stress testing.
Impact on stakeholders EU depositors benefit from broader coverage and harmonised protection for temporary high balances, increasing legal certainty and consumer confidence. However, the exclusion of MREL deposits may affect institutional depositors. Credit institutions face clearer payout rules and stronger enforcement of contributions, potentially increasing compliance costs, though harmonisation may reduce administrative complexity across member states. National DGSs gain streamlined procedures and new stress-testing guidelines, improving operational efficiency but requiring adaptation to new rules. The EBA is tasked with developing stress-testing guidelines, enhancing supervisory consistency.
Next steps The Council's position enables the start of trilogue negotiations with the European Parliament to finalise the directive. Once adopted, member states will need to transpose the new rules into national law, leading to more uniform deposit insurance across the EU.
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