COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(93) 253 final-SYN415 
Brussels, 7 June 1993 
Amended proposal for a 
COUNCIL DIRECTIVE 
ON DEPOSIT-GUARANTEE SCHEMES 
(presented by the Commission pursuant to Article 149(3) 
of the EEC-Treaty) 
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AMENDED PROPOSAL FOR A COUNCIL DIRECTIVE ON 
DEPOSIT-GUARANTEE SCHEMES 
EXPLANATORY MEMORANDUM 
I. Retnjpder çf prpçedure 
1. On 6 May 1992 the Commission adopted a proposal for a Directive on 
deposit-guarantee schemes,1 which was sent to the Council by letter 
dated 14 June. 
The Council immediately forwarded this text to Parliament and to the 
Economic and Social Committee, and on 14 July began to examine the 
proposal. 
2. The Economic and Social Committee unanimously adopted an opinion on the 
Commission proposal at its 300th plenary meeting which took place in 
Brussels on 22 October.2 
The European Parliament adopted the legislative resolution embodying the 
opinion of Parliament on the Commission proposal for a Council Directive 
at its sitting of 10 March 1993. 
3. This amended proposal has been drafted to take account of the outcome of 
the consultation of these two institutions. 
4. The European Parliament and the Economic and Social Committee have 
welcomed the proposal for a minimum degree of harmonization and 
recognized the justification of opting for branch depositors to be 
guaranteed by the home-country scheme. 
1 OJ No C 163, 30.06.1992. 
2 0J No C 332, 16.12.1992. 
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II. Comments on amendments 
The European Parliament has suggested two key amendments to the Directive, 
namely an increase in the minimum amount of the guarantee from ECU 15 000 to 
ECU 20 000 and the exemption from compulsory membership of a deposit-
guarantee scheme of authorized institutions which receive deposits from the 
public but already enjoy protection because they belong to a scheme which 
guarantees the institutions themselves (and therefore their depositors). 
In several Member States, the federative body, where it exists, belongs to 
the national guarantee scheme; in other Member States, this is not possible 
because both the guarantee scheme and the network itself are organized 
differently. 
Parliament explains its proposal in the new recital which is partly taken 
over in the amended proposal; this recalls the efficiency of these schemes 
and observes that they satisfy the Directive's objectives even though they 
"pursue a slightly different protection goal". 
Comments on individual Articles 
Article 1 
With greater clarity in mind, two definitions have been added to 
paragraph 1> these two definitions take over, unchanged, the ones already 
used in Article 1 of the first banking Directive. 
The definition of deposits has been amended to exclude from the Directive's 
scope bonds of a special nature the holders of which already enjoy 
protection because these securities are linked to property guarantees, which 
gives their holder a priority right to reimbursement out of the proceeds of 
the sale of the mortgaged property. 
This exclusion was also requested by the Economic and Social Committee. 
3 
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In Article 1(2) a reference has been added to cover the case of banks which 
deposit in another bank "funds entrusted to it by one of its clients". In 
the view of Parliament, the client must not forfeit his guarantee and "the 
principle of the 'beneficial owner' expanded in Article 5(3) should apply, 
provided that the existence and identity of the beneficial owner can be 
established".3 
Article 2 
The inclusion in Article 2 of the content of Parliament's amendments Nos 8, 
10, 11 and 12, all of which relate to this Article, has required it to be 
redrated more extensively than is warranted by the strict content of the 
amendments, because it was necessary to clarify certain points which had 
become necessary for the cohesiveness of the whole text. 
For example, it was necessary to spell out the limits of the exemption and 
to amend the details of the exclusion procedure slightly in order to comply 
with Parliament's request for the Article to make clear that it is the 
guarantee scheme, or rather its managers, which undertake the exclusion. It 
was therefore necessary to add that they cannot do so unless authorized by 
national law and with the consent of the supervisory authorities; this was 
not explicitly stated in the initial version of the text but does not change 
its meaning. 
The wording adopted in Article 2(1) of this amended proposal corresponds in 
spirit to Parliament's suggestion, stating the exemption conditions more 
fully (institutions must be covered by a scheme which guarantees their total 
solvency). 
With regard to Article 2(3) the Commission had proposed that, after 
exclusion from a guarantee scheme, deposits (old or new) be guaranteed for a 
one-year period. 
The Economic and Social Committee requested that this one-year guarantee be 
limited to deposits existing at the time of the exclusion. 
3 Document PE 202.403/fin. (Explanatory statement, p.15). 
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Parliament requested that this guarantee be limited to existing deposits and 
to those placed with in one month of the exclusion. 
The Commission wished an intervention by the supervisory authorities to make 
it impossible for credit institutions not covered by a guarantee scheme to 
receive new deposits, and therefore supported Parliament's request for an 
amendment of this point. 
Article 3 
Article 3 has chiefly been amended to introduce a rule which states that 
Member States shall take account of the coverage which may be received by 
branches established by credit institutions with their head office outside 
the Committee if they already belong to a guarantee scheme (this must be at 
least equivalent to the scheme in force in the Member State in which they 
are located). 
Article 4 
Article 4 increases to ECU 20 000 the minimum level of compensation, 
provides that deposits of "vital importance" may be guaranteed in their 
entirety and adds a review clause. 
For this review clause, a period of five years has been laid down (instead 
of the two years requested); the period could of course be shorter if 
necessary, but it seems to be the minimum within which some experience can 
be acquired. Five years might even prove insufficient in view of the 
experience involved since it is very desirable for recourse to the 
deposit-guarantee scheme to remain exceptional. 
The two-year period envisagedn by Parliament is somewhat unrealistic given 
the soundness of European institutions and the supervision to which they are 
subject. Any monetary readjustments that Member States might consider 
necessary are permitted at any time, since the Directive allows for the 
level of coverage to be set above the harmonized minimum. 
5" 
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Article 6 
Article 6 sets out the details concerning information. 
None of the other amendments requested by Parliament and the Economic and 
Social Committee has been adopted. The two institutions have been informed 
of the reasons behind the rejection of their amendment request. 
Ml. Parliament amendments not Included the amended proposal 
17th Recital (amendment No 4) 
This Recital concerns Article 3 (treatment of branches of third-country 
institutions), paragraph 1 of which has been amended in line with 
Parliament's amendment No 12. However, the amendment requested for this 
Recital concerns Article 3(2), which has not been amended: there is 
therefore no reason to delete, in order to satisfy Parliament, the 
requirement to inform depositors, which is an essential part of 
Article 3(2). 
Article 1 
There are six amendments to this Article. Amendment No 5 adds two 
definitions (credit institution and branch), which there has been no 
difficulty in taking over in the modified proposal, and an exception 
covering a particular category of bonds, defined in a previous directive, 
which may also be adopted. Two amendments requested by Parliament have not 
been able to be adopted: the last indent of the amendment refers to 
categories of bonds which are not covered by uniform arrangements at 
European level and are thus listed in the annex, with certain Member States 
wishing them to be covered by the Directive, with others not requiring this. 
The reference to "interest due and not paid" raises the problem of 
contractual freedom: the method of calculation described by Parliament may 
well be the most common one, but the contracting parties should be able to 
envisage others (such an addition would prohibit this, which does not seem 
proportionate). 
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Amendment No 6 would completely change the whole tenor of the Commission 
proposal as regards non-availability of deposits, by lengthening the ten-day 
period indefinitely. The ten-day limit is necessary if the provision is 
not to lose all effect, and it is even desirable that the guarantee should 
begin to be paid to depositors before the ten days have elapsed. 
Amendment No 20 refers to deposits made in order to defraud the system. 
There seems no point in specifying that such deposits shall not be 
reimbursed, precisely because they are not deposits to be repaid "under the 
legal and contractual conditions" applicable to them (Article 1(1)). If 
the fraud is discovered before payment, they will of course not be covered 
by the guarantee and if the fraud is discovered after payment, the sums 
received will have to be returned to the guarantee system, not under this 
Directive but under ordinary law of each Member State. 
Art icle 2 
There are four amendments concerning this Article, two of which have been 
taken over in the amended proposal. 
Amendment No 8 refers to postal banks, in connection with Article 3 of 
Directive 77/780/EEC, which specifically excludes certain of them. Their 
inclusion is thus erroneous. 
The main point of this amendment is to loosen the requirement for ail 
recognized institutions to join a deposit-guarantee scheme. The Commission 
is able to accept some very limited exceptions to the principles lying 
behind the Directive, but their scope must be specified in a "communautaire" 
way and must not be dependent exclusively on assessment by national control 
authorities. This is why it has been possible to adopt amendment No 21, 
referring to systems designed to protect institutions (the scope of the 
exception to be defined by the amended proposal) and not amendment No 8, 
which refers to "coverage which is recognized as comparable by the 
supervisory authority concerned". 
Amendment No 9 affirms a principle of non-discrimination which derives from 
the Treaty and not from this Directive, and it has therefore been taken 
over. 
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Article 4a (new) amendment No 16 
This amendment adds an Article to the Directive in order to enable 
depositors to take direct action against the deposit-guarantee scheme. 
There is no doubt some reason for this in those countries where only 
institutions which are members of the scheme will be able to have recourse 
to the courts. At Community level, however, the practical scope of this 
amendment is likely to be limited, as depositors with branches will 
necessarily have to exercise this right in another Member State. The 
Commission proposal therefore does not take over this amendment. 
Art icle 7 amendment No 18 
This amendment reduces the time limit for payment from three months to two. 
This touches on an essential point in the Commission proposal: the 
three month limit cannot be reduced, as it is in any case extremely short 
given the verification operations which have to be carried out before making 
payments. The checks may be made very long and difficult by the disorder 
often encountered in the accounts of credit institutions which are in 
crisis. 
Annex - point 6 (amendment No 19) 
The purpose of this amendment is to delete pension funds from the annex and 
so to make it compulsory to cover them. This does not take account of the 
very different arrangements covering such funds. Certain countries, where 
pension funds are much better protected, by other domestic rules, are 
radically opposed to bringing them, within the scope of bank deposit 
protection schemes. 
COMMISSION 
Amended proposal for a Council Directive on deposit-guarantee schemes 
INITIAL PROPOSAL AMENDED PROPOSAL 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing 
the European Economic Community, and in 
particular the first and third sentences 
of Article 57(2) thereof, 
Having regard to the proposal from the 
Comm i ss i on, 
In cooperation with the European 
Parliament, 
Having regard to the opinion of the 
Econom i c and Soc i a I Comm i t tee, 
Tenth recital Tenth recital 
Whereas, however, the harmonized guarantee 
level must not be too low in order not to 
leave too great a number of deposits 
outside the minimum protection threshold; 
whereas in the absence of statistics on 
the amount and distribution of deposits in 
Community credit institutions, it seemed 
reasonable to take as a basis the median 
guarantee offered by the national systems; 
whereas that amount is ECU 15 000; Whereas, however, the harmonized 
guarantee level must not be too low 
in order not to leave too great a 
number of depositors outside the 
minimum protection threshold; whereas 
i t seems reasonable to take as a 
basis an amount of ECU 20 000 as the 
harmonized guarantee level: 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Eleventh recital Eleventh recital 
Whereas in the six Member States which are Whereas some Member States offer 
above that median level, the guarantee depositors a coverage of their 
schemes offer depositors a coverage of deposits which is higher: whereas it 
their deposits which is higher; whereas it does not seem appropriate to require 
does not seem appropriate to require that that these schemes, certain of which 
these schemes, certain of which have been have been introduced only recently 
introduced only recently pursuant to pursuant to Recommendation 87/63/EEC, 
Recommendation 87/63/EEC, be amended on be amended on this point; 
this point; 
Fourteenth recital a (new) 
HAS ADOPTED THIS DIRECTIVE Whereas harmonizat ion of 
deposit-quarantee schemes in the 
Community must under no circumstances 
Jeopardize schemes based on the 
protect ion of inst i tut ions. 
part icularly as they have 
demonstrated their efficiency; 
whereas some Member States may accept 
that institutions participating in 
such schemes, which pursue a slightly 
different protection goal, satisfy 
the Directive's objectives; 
/io 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Article 1 Art icle 1 
1.'For the purpose of this Directive, the 1. For the purpose of this Directive 
following definitions shall apply: the following definitions shall 
apply: 
Credit institution: an undertaking 
whose business is to receive deposits 
or other repayable funds from the 
public and to grant credits for its 
own account. 
Branch: a place of business which 
forms a legally dependent part of a 
credit institution and which conducts 
directly all or some of the 
operations inherent in the business 
of credit institutions: any number of 
1 branches set up in the same Member 
State by a credit institution having 
its head office in another Member 
State shall be regarded as a single 
branch: 
Depos i t: credit balances which result from Depos i t: Credit balances which result 
funds left in accounts or from temporary from funds left in accounts or from 
situations deriving from normal banking temporary situations deriving from 
transactions and which the credit normal banking transactions and which 
institution must repay under the legal and the credit institution must repay 
contractual conditions applicable, and under the legal and contractual 
claims for which negotiable certificates conditions applicable, and claims for 
have been issued by a credit institution; which negotiable certificates have 
been issued by a credit institution, 
with the exception of bonds which 
sat isfy the condi t ions of 
Article 22(4) of the Directive 
concerning undertakings for 
collective investment in transferable 
securities (UCITS) (88/220/EEC); 
The other definitions are unchanged. 
H 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Article 1 (end) Art icle 1 (end) 
2. The following shall be excluded from 
any repayment by the guarantee schemes: 
- the obligations towards other credit 
inst itut ions; 
- subordinated loans in respect of which 
there exist binding agreements whereby 
such loans are not to be repaid until 
after settlement of all other debts in 
the event of the bankruptcy or 
liquidation of the credit institution. 2. The following shall be excluded 
from any repayment by the guarantee 
schemes ; 
- subject to the provisions of 
Article 5(3). the obligations 
towards other credit institutions; 
- subordinated loans in respect of 
which there exist binding 
agreements whereby such loans are 
not to be repaid until after 
settlement of all other debts in 
the event of the bankruptcy or 
liquidation of the credit 
inst1 tut ion. 
/Il 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Article 2 Article 2 
1. Each Member State shall ensure that on 1. Each Member State shall ensure 
its territory one or more that on its territory one or more 
deposit-guarantee schemes are introduced deposit-guarantee schemes are 
in which all credit institutions introduced. With the exception of 
authorized in that Member State under the cases referred to in the 
Article 3 of Directive 77/780/EEC must fol lowing subparagraph. no 
take part. The schemes shall cover the institution authorized in that Member 
depositors of branches set up by such State under Article 3 of 
institutions in other Member States. Directive 77/780/EEC may accept 
deposits unless it is a member of one 
of these schemes. The schemes shall 
cover the depositors of branches set 
up by such institutions in other 
Member States. 
Nevertheless. Member States may 
exempt a credit institution from 
taking part in a deposit-guarantee 
scheme if that institution belongs to 
a scheme which protects the credit 
institution itself and in particular 
guarantees its liquid assets and its 
solvency, provided that: 
- such protection is recognized as 
equivalent to that provided by the 
authorized scheme or schemes, and 
- the protection concerned is not 
that granted to a public credit 
institution by Member States 
themselves or by their local 
author it ies. 
2. Unchanged. 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Art icle 2 (end) Art icle 2 (end) 
3. If one of the credit institutions 
required by paragraph 1 to take part in 
the scheme or one of the branches granted 
voluntary membership under paragraph 2 
does not comply with the obligations 
incumbent on it as a member of the 
deposit-guarantee scheme, the supervisory 
authority which issued the authorization 
shalI be not if ied. 3. If one of the credit institutions 
required by the first subparagraph of 
paragraph 1 to take part in the 
scheme or one of the branches granted 
voluntary membership under 
paragraph 2 does not comply with the 
obligations incumbent on it as a 
member of the deposit-guarantee 
scheme, the supervisory authority 
which issued the authorization shall 
be notified and, in cooperation with 
the managers of the guarantee scheme, 
shall take all appropriate measures. 
including the imposition of 
penalties, to secure compliance by 
the credit institution with its 
obi igat ions. 
After taking all the measures necessary to 
secure compliance by the credit 
institution, or branch thereof, with its 
obligations and after noting the decisions 
taken by the supervisory authority (for 
example reorganization or withdrawal of 
the authorization), the guarantee scheme 
may exclude the credit institution or 
branch. If. as a result of these measures 
compliance by the credit institution, 
or branch thereof, with their 
obligations is not secured, the 
managers of the guarantee scheme may 
exclude the credit institution or 
branch, where national law authorizes 
such exclusion and with the explicit 
consent of the supervisory authority. 
In that case, the guarantee covering the In that case, the guarantee covering 
institution's depositors shall 
maintained for twelve months. be the deposits with that institution, 
or branch thereof, which were placed 
no later than one month after the 
date of exclusion. shall be 
maintained for twelve months from the 
date of exclusion. 
a. 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Art icle 3 Art icle 3 
1. Subject to Article 9(1) of 1. Subject to Article 9(1) of 
Directive 77/780/EEC, Member States may Directive 77/780/EEC, Member States 
stipulate that the branches established by shall ensure that the branches 
credit institutions with their head office established by credit institutions 
outside the Community must join a deposit- with their head office outside the 
guarantee scheme in operation on their Community receive coverage equivalent 
territory. to that applicable in the Member 
State concerned under the terms of a 
guarantee scheme to which their 
parent institution belongs. 
FaiIing this. Member States may 
stipulate that the branches 
established by credit institutions 
with their head office outside the 
Community must Join a deposit-
guarantee scheme in operation on 
their territory. 
2. Unchanged 
3. Unchanged. 
/T 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Article 4 Article 4 
1. The deposit-guarantee schemes shall 1. The deposit-guarantee schemes 
stipulate that the aggregate deposits of a shall stipulate that the aggregate 
given depositor must be covered up to deposits of a given depositor must be 
ECU 15 000 in the event of a financial covered up to ECU 20 000 in the event 
crisis in a credit institution rendering of a financial crisis in a credit 
deposits unavailable. institution rendering deposits 
unavailab le. 
2. Unchanged. 
3. This Article shall not preclude the 3. This Article shall not preclude 
retention or adoption of provisions which the retention or adoption of 
offer a higher guarantee ceiling. provisions which offer more 
comprehensive cover for depositors. 
in particular by extending the 
categories of investors protected by 
*'•• the guarantee or raising the maximum 
level of compensation, nor s Jail It 
preclude the adoption of provisions 
stipulating that certain deposits of 
vital importance such as pension 
funds must be guaranteed in their 
ent irety. 
4. Member States may limit the guarantee 4. Member States may limit the 
provided for in paragraph 1 or that guarantee provided for in paragraph 1 
referred to in paragraph 3 to a specified or that referred to in paragraph 3 to 
percentage of the deposits. However, the a specified percentage of the 
percentage guaranteed must equal or exceed deposits. However, the percentage 
90% of the aggregate deposits until the guaranteed must equal or exceed 90% 
amount to be paid under the guarantee of the aggregate deposits until the 
reaches ECU 15 000. amount to be paid under the guarantee 
reaches ECU 20 000. 
U 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Art icle 4 (end) 
5. No later than five years after the 
date mentioned in Article 8(t). the 
Commission shall present a report to 
the Council on the application of 
this Article. accompanied if 
necessary by proposals which in 
particular take account of changes in 
the banking sector and in the 
economic and monetary situation in 
the Community. 
<? 
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INITIAL PROPOSAL AMENDED PROPOSAL 
Art icle 5: Unchanged 
Art icle 6 Article 6 
1. Member States shall ensure that the 1. Member States shall ensure that 
managers of the credit institution provide the managers of the credit 
depositors with the information necessary institution provide depositors with 
for them to identify the deposit-guarantee the information necessary for them to 
scheme in which the institution and its identify the deposit-guarantee scheme 
branches take part within the Community, in which the institution and its 
The limits or ceilings applicable under ©ranches take part within the 
the deposit-guarantee scheme shall be Community. The amount of coverage 
indicated in a readily-comprehensible under the deposit guarantee shall be 
manner. made available to depositors. 
Information shall also be given at 
first request on the conditions for 
* compensation and the formalities 
which must be fulfilled in order to 
obtain compensation. 
2. Unchanged. 
Art icies 7 to 9: Unchanged. 
Annex: Unchanged 
n 
ISSN 0254-1475 
COM (93) 253 final 
DOCUMENTS 
EN 10 
Catalogue number : CB-CO-93-282-EN-C 
ISBN 92-77-56333-8 
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