Regulatory Alerts2016-05-27
Circular 5/2016 of the Bank of Spain on the calculation method for deposit guarantee scheme contributions to be proportional to entities' risk profiles
The Bank of Spain issued Circular 5/2016 to establish a risk-based calculation method ensuring that contributions by credit institutions to the Deposit Guarantee Fund are proportional to their individual risk profiles. The regulation implements European Directive 2014/49/EU by defining five risk categories—capital, liquidity, asset quality, business model, and potential losses—each with specific indicators and weights. It mandates the use of aggregated risk scores and economic cycle adjustments to determine final contribution amounts, with the methodology first applied to the 2016 fiscal year.
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