These guidelines are addressed to competent authorities and designated authorities as
Competent authorities and designated authorities should ensure that these guidelines are
applied by DGSs when developing methods for calculating risk-based contributions by their
members, and are used when approving these calculation methods in accordance with
Article 13(2) of Directive 2014/49/EU.
Where the competent authorities or designated authorities are responsible for developing the
calculation method, they should apply the provisions of these guidelines.
The calculation methods should be applicable both to ex-ante contributions and extraordinary
risk categorisation as the one applied for the purpose of the last annual ex-ante contributions.
DGSs should seek approval from the competent authorities before the initial implementation
approval at a frequency which competent authorities deem appropriate and, in any event,
before introducing any material changes to an already approved calculation method. Non-
material changes should be notified to the competent authorities on a yearly basis.
requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, OJ L 176,
27.06.2013, p. 1.
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of
credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive
2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC Text with EEA relevance, OJ L 176, 27.06.2013,
According to Article 15(1) of Directive 2014/49/EU, Member States are to check that branches
established in their territory by a credit institution which has its head office outside the Union
have protection equivalent to that prescribed in Directive 2014/49/EU. If protection is not
equivalent, Member States may, subject to Article 47(1) of Directive 2013/36/EU, stipulate
that those branches must join a DGS in operation within the Member State territories. In any
event, the DGSs are bound by the obligations to raise risk-based contributions from their
members pursuant to Articles 10 and 13 of Directive 2014/49/EU.
According to Article 47 of Directive 2013/36/EU, the prudential requirements and supervisory
Member States. Many of the risk adjustment metrics provided for by these guidelines do not
apply to these branches and, consequently, it is appropriate to leave to Member States the
power to specify the risk adjustment for such branches in a consistent manner with the
treatment afforded to them under national law. Therefore, the branches of third-country
credit institutions should not fall within the scope of these guidelines.
Title II- Guidance on developing
Contribution schemes should:
ensure that the cost of financing DGSs is, in principle, borne by credit institutions
ensure that the target level is reached within the build-up period laid down in Article 10
higher contributions from riskier institutions; this should also ensure that failed
institutions have properly contributed in advance.
Part II - Principles for developing the calculation methods
DGSs, competent authorities and designated authorities, while developing or approving the
The contribution of each member institution should, as far as possible, reflect:
the likelihood of the institution’s failure (i.e. whether the institution is failing or is likely to
on the recovery and
recoveries from the bankruptcy estate of the failed institution.
The build-up period for the target level envisaged in Article 10(2) of Directive 2014/49/EU will
be no more than 10 years. It may be extended by additional 4 years if there is cumulative
disbursement exceeding 0.8% of covered deposits. Within that time horizon, contributions
should be spread out as evenly as possible over time until the target level is reached, but with
due account of the phase of the business cycle and the pro-cyclical impact that contributions
may have on the financial position of member institutions.
In any event, Directive 2014/49/EU does not prevent Member States from setting a higher
target level or providing that a DGS may request member institutions to make ex-ante
contributions even after the target level is reached in order to fulfil the objective mentioned in
Principle 3: incentives provided by contributions to the DGSs should be aligned with prudential
In order to mitigate moral hazard the incentives provided by the DGS contribution scheme
should be compatible with prudential requirements (i.e. capital and liquidity requirements
reflecting the risk of the member institution).
In particular, if calculation methods are developed and calibrated using statistical and
institutions should be consistent with the prudential requirements applicable to the
Principle 4: calculation methods should take into account specific characteristics of the banking
sector, and should be compatible with the regulatory regime, and accounting and reporting
practices in the Member State where the DGS is established
Calculation methods should be appropriate for the structure of the banking sector in a
Member State. Therefore, DGSs established in Member States with a large number of
heterogeneous institutions should develop more sophisticated calculation methods, applying
Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for
an appropriately large number of risk classes (or a sliding scale approach) in order to properly
differentiate institutions according to their risk profile. DGSs established in Member States
with a more homogenous banking sector should use simpler calculation methods. In any case,
the risk indicators selected for the calculation method should enable the DGS to adequately
capture differences in the risk profile of the institutions while taking due account of their
Principle 5: the rules for calculating contributions should be objective and transparent
Risk-based contribution systems should be objective and ensure that deposit taking
institutions with similar characteristics (in particular in terms of risk, systemic importance and
business model) are categorised similarly.
DGS contribution schemes should be transparent, understandable and well explained. As a
member institutions. Transparency will help the member institutions understand the purpose
of applying risk-based contributions and will make the scheme predictable for them.
Principle 6: the required data for the calculation of contributions should not lead to excessive
additional reporting requirements
For the purpose of calculating contributions DGSs should, as far as possible, make use of
information already available to them or requested from member institutions by competent
authorities as part of their reporting obligations. A balance should be struck between requiring
information necessary for the calculation of contributions and avoiding making unduly
burdensome requests for information from the member institutions.
The DGSs should only require data that is not already reported on a regular basis if such
In cases where the DGS does not gather information directly from member institutions but
relies on the information provided by the competent authority, either statutory provisions or
formal arrangements should be in place so that the information required for administering the
contributions is collected and transmitted on a timely basis.
Principle 7: confidential information should be protected
DGSs should keep confidential the information used for calculating contributions which is not
otherwise publicly disclosed. However, the DGSs should disclose to the public at least the
description of the calculation method and the parameters of the calculation formula, including
risk indicators but not necessarily their respective weights. In contrast, the results of the risk
classification and its components for a particular member institution should be disclosed to
that institution and not to the public.
Principle 8: calculation methods should be consistent with relevant historical data
Where the DGS has access to the relevant historical data of financial institutions it should use
that data when calibrating and re-calibrating the parameters of the calculation methods. For
this purpose historical data may include: (i) data about institutions’ failures and events where
an institution has been likely to fail but its failure has been avoided by actions of public
authorities, or other events when risks posed by the member institutions to the DGS have
materialised; and (ii) data about recovery rates of the DGS from such events.
Appropriate corrections to the calculation methods should be made in cases where regulatory
or institutional changes have occurred (for example, a change in the minimum levels of
regulatory capital requirements).
In advance of the 2017 review of these guidelines, competent authorities should compare the
the SREP. This comparison should be made in a holistic manner (for example, using samples).
The competent authorities should inform the EBA of the holistic outcome of this comparison
and the discrepancies observed.
Part III - Mandatory elements of the calculation methods
The essential elements for each calculation method of risk-based contributions to DGSs should
categories and core risk indicators. These elements are described in the following paragraphs.
Annual contributions to a DGS by individual member institutions should be calculated using
the formula provided below.
Annual contribution from member institution ‘i’
Contribution rate (identical for all member institutions in a given year)
Covered deposits for member institution ‘i’
Adjustment coefficient (identical for all institutions in a given year)
The contribution rate is the percentage rate that should be paid by a member institution with
an aggregate risk weight (ARW) that equals 100% (i.e. assuming no risk differentiation) in order
to reach the annual target level. During the initial period, the calibration of the contribution
rate should ensure that the target level is reached and that the annual contributions are
spread out as evenly as possible over time.
The annual target level should be established, at a minimum, by dividing the amount of
financial means that the DGS still needs to collect in order to meet the target level, by the
remaining build-up period (expressed in years) for reaching the target level. This formula is,
however, without prejudice to the discretion left to Member States to foresee that DGSs
continue collecting ex-ante contributions even after reaching the target level.
In line with the fourth subparagraph of Article 10(2) of Directive 2014/49/EU, when
account the phase of the business cycle and the pro-cyclical impact that contributions may
have on the financial position of member institutions. The cyclical adjustment achieved via an
increased or decreased annual target level should be established so as to avoid collecting
excessive contributions during economic downturns, and to allow for a faster build-up of the
DGS fund in economic upturns. The cyclical adjustment should take into account the risk
analysis undertaken by the relevant designated macroprudential authorities and reflect
current economic conditions as well as medium-term perspectives, as persistent economic
difficulties may not justify low contributions indefinitely. Competent authorities that have
approved an own risk-based method pursuant to Article 13(2) of Directive 2014/49/EC may
require an amendment of the calculation method to properly reflect developments in the
business cycle that have occurred since the initial approval of the method. The cyclical
adjustment may also take into account the expected evolution in the covered deposits base.
The contribution rate should be established by the DGS on a yearly basis by dividing the
annual target level by the sum of covered deposits of all its member institutions.
Where, subsequently to a call for contributions, data related to some institutions would
require an update (for example, in order to correct accounting errors) the DGS should be able
to postpone the adjustment to the next call for contributions.
The following table presents the evolution of amounts of covered deposits over four consecutive
years for all member institutions affiliated to a particular DGS. It shows corresponding target
levels for DGS funds calculated on the basis of the current amount of covered deposits.
Target level (CD ×
For each year, calculation of the annual target level and contribution rate (CR) should be
conducted as described below, under the following assumptions:
with the aim of reaching the target level within 10 years;
(b) Aggregate risk weight (ARW)
The aggregate risk weight for a member institution ‘i’ (ARW
) should be assigned on the basis
of the aggregate risk score for that institution (ARS
is calculated by summing up all individual indicators’ risk scores adjusted for
appropriate indicator weights. Two different methods for calculating the ARS
to the member institution on the basis on its ARS
are the ‘bucket’ method and the
‘sliding scale’ method, laid down in more detail in Annex 1. The DGSs should choose the
calculation method after taking into consideration the characteristics of the national banking
sector, and the degree of heterogeneity among institutions.
for that year.
Annual target level
= 1/10 × Target level
= 1/10 × EUR 8,000 = EUR 800
= Annual target level
= EUR 800/EUR 1,000,000 = 0.00080 = 0.080%
At the end of year 20X1 the funds available to the DGS amount to EUR 800.
= 1/9 × (Target level
– Funds already available in the DGS) =
= 1/9 × (EUR 9,600 - EUR 800) = EUR 8,800/9 = EUR 978
= EUR 978/EUR 1,200,000 = 0.00081 = 0.081%
At the end of year 20X2 the funds available to the DGS amount to EUR 1,778 (= EUR 800 + EUR
= 1/8 × (Target level
= 1/8 × (EUR 10,400 – EUR 1,778) = EUR 8,622/8= EUR 1,078
= EUR 1,078/EUR 1,300,000 = 0.00083 = 0.083%
At the end of year 20X3 the funds available to the DGS amount to EUR 2,856 (= EUR 1,778 + EUR
Annual target level
= 1/7 × (Target level
– Funds already available in the DGS) =
= 1/7 × (EUR 8,800 – EUR 2,856) = EUR 5,944/7 = EUR 849
= EUR 849/EUR 1,100,000 = 0.00077 = 0.077%
At the end of year 20X4 the funds available to the DGS amount to EUR 3,705 (= EUR 2,856 + EUR
According to Article 10(2) of Directive 2014/49/EU, the available financial means of a DGS
must at least reach the target level specified in Directive 2014/49/EU within a 10-year period.
In line with the principle laid down in paragraph 20, these contributions should be spread out
as evenly as possible over time until the target level is reached, but with due account of the
phase of the business cycle and the pro-cyclical impact of contributions on the institutions’
If the sum of annual contributions from all member institutions is based only on the CD
and the fixed contribution rate (CR), the amount of contributions in a given year might
this discrepancy, an adjustment coefficient (µ) should be used. The coefficient should adjust
the amount of total contributions (C) so as to reach the annual target level where otherwise
the total contributions would be too high or too low.