European Banking Authority Publishes Peer Review of Deposit Guarantee Scheme Stress Test Results06/17/2020The European Banking Authority has published the results of its peer review of EU deposit guarantee schemes. The EU Deposit Guarantee Scheme Directive establishes requirements for EU DGSs, including that Member States conduct stress tests of their DGSs. Member States were required to report on their stress tests by July 3, 2019, and the EBA has based its peer review report on the results of the tests. The report is intended to assess the resilience of EU DGSs and identify good practices and areas for improvement.
The EBA found that the overall resilience of DGSs was “fair”, the second best result that could have been achieved, meaning there were areas for improvement but that these were isolated and/or could be easily addressed. The report also includes suggestions for how the stress testing framework could be improved in the context of COVID-19, including incentivising DGSs to perform “special” tests allowing them to assess extreme scenarios such as pandemics or significant operational disruptions. The shortcomings in the DGS framework identified by the EBA will form the basis of potential future revisions to the EBA Guidelines on stress testing DGSs.
View the EBA's report on DGSs.
View details of the EBA's opinions on the Deposit Guarantee Scheme Directive.
Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center.
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