Central Bank identifies calculation errors in Deposit Guarantee Scheme contributions
13 January 2023
Press Release
• Calculation errors apply primarily to credit union contributions to scheme
• Total of c. €253,000 or less than c. 0.1% of the value of funds collected
• Consumers are unaffected by calculation errors
The Central Bank of Ireland has today written to member institutions participating in the Deposit Guarantee Scheme and confirmed that it has identified errors in its calculation of institutions’ contributions to the Scheme. These errors resulted in some member institutions, mostly credit unions, being overcharged and some being undercharged, by an overall equal amount.
While our assessment is still under way, the Bank’s initial findings are that two years’ contribution processes are affected (2019 and 2021), and that the extent of the matter totals c. €253,000 across all institutions, or less than c. 0.1% of the total value of funds collected. Due to the nature of the calculation process, it will result in undercharges and overcharges to a number of member institutions, but there is no effect on the overall value of the Scheme.
We apologise for this and we understand and regret any inconvenience that may arise, for credit unions in particular, as a result. It is clear from our initial assessment, however, that the maximum undercharges/overcharges involved are not in any way significant in terms of the financial position of any individual credit union.
Next steps
We will move as quickly as possible to finalise our assessment, to identify next steps and to regularise the position of the institutions affected.
As soon as our assessment is complete, expected in February 2023, we will communicate our planned process for regularising the position in terms of monies due to the Fund, or monies due from the Fund, for all affected institutions. We will prioritise refunding overcharges to affected institutions.
In the meantime, no immediate action is required by any institution until they receive further communication on this matter.
Update - 13 February 2023
We have finalised our assessment and all affected institutions have been contacted.
Further Information
The European Union (Deposit Guarantee Schemes) Regulations 2015 (S.I. No. 2016) mandate the DGS Contributory Fund (“the Fund”) to reach an available financial means of 0.8% of covered deposits by 2024. In order to reach this target level, since 2016 credit institutions have been required to make appropriate contributions to the Fund annually, in accordance with European Banking Authority Guidelines. An outline of the methodology employed by the Central Bank (“the Bank”) to calculate contributions from credit institutions is available on the
Bank’s website.
The amount held in the Fund is unaffected by this issue. Once rectified, this will not result in any change in the monetary value of the Fund, which remains on target to reach its legislative funding level of 0.8% of covered deposits by July 2024.