Financing

Pursuant to Articles 179(2) and 180 of the Law of 18 December 2015 on the failure of credit institutions and certain investment firms, as amended, the Fonds de garantie des dépôts Luxembourg (FGDL, Luxembourg Deposit Guarantee Fund) collects contributions from credit institutions, including Luxembourg branches of the credit institutions having their registered office in a third country, as well as POST Luxembourg (for the provision of postal financial services). The FGDL reached the target level of 0.8% of covered deposits at the end of 2018. In line with the growth of guaranteed deposits, the FGDL continued to collect contributions in order to maintain its target level.

In accordance with Article 180(1) of the aforementioned law, the FGDL collects contributions during the period 2019 to 2026 in order to provide the FGDL with a buffer of additional financial means representing another extra 0.8% of the covered deposits. The FGDL will therefore have to double the amount of assets compared to the minimum provided for by Directive 2014/49/EU.

The amount of accumulated contributions available, as well as the amount of covered deposits are published by the European Banking Authority:

Deposit Guarantee Schemes Data

If the financial resources thus accumulated are not sufficient to repay the covered deposits in the event of a failure of a member institution, the FGDL has the right to raise additional contributions and to borrow from third parties as provided for in Article 179, paragraph 2, of the aforementioned law. To this end, the FGDL has arranged a syndicated credit line.

The methodology applicable as of 2020 for the calculation of contributions, has been drawn up by the CPDI in accordance with Article 182 of the Law of 18 December 2015 and published in Circular CSSF-CPDI 20/21. The method takes into account the risk and annual evolution of each member’s covered deposits.