QA2018-23 - Deposits T01.00

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Feb 01, 2024
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QA2018-23

Question


There are costumers with several preferential deposits consisting of different product types and even assigned to different insolvency ranks with aggregated liabilities of more than EUR 100.000. How should the covered fraction of those deposits be allocated? E. g. - proportionally to the carrying or outstanding amount, - to the longer residual maturity or - to the more subordinated class?


Response


Regarding covered deposits, if the non-covered part of the deposits spans across various maturity buckets, the breakdown must be reflected in the various maturity buckets. The breakdown by residual maturity should take into account any optionality for the depositors to require early reimbursement. The covered deposits should not be filled in first by deposits having short term and then by those having longer term. A pro rata allocation of deposits across the various remaining term buckets should be applied, in order to formulate the composition of the covered part.