Deposit Guarantee Schemes Directive

Brev 17. oktober 2011 til den britiske finansministeren om innskuddsgarantidirektivet.

I refer to our meeting 18 May 2011, and to my letter 31 May 2011 regarding the Deposit Guarantee Schemes Directive (enclosed).

As you may recall, it is of great importance for Norway to be able to maintain our present level of coverage of 2 million NOK per depositor per bank (about 250 000 euro).

The ECON Committee in the European Parliament has included a provision (Article 5.3a (enclosed)) in their report which, if adopted, will allow Norway to continue this important part of Norwegian financial regulation if the directive is included in the EEA Agreement.

The effect of the proposed Article 5.3a will be that deposits from depositors resident in Norway are covered up to 2 million per depositor per bank. Foreign banks operating in Norway may offer the same level of coverage to Norwegian depositors as Norwegian banks, through topping-up membership in the Norwegian deposit guarantee scheme. Since the higher coverage level may only apply to depositors resident in Norway, it will not be possible for Norwegian banks to attract deposits from depositors abroad through a high deposit guarantee.

The ECON Committee’s proposal for Article 5.3a will therefore not interfere with the competition between the member states. Further, the proposed article will not interfere with the obligation on Norwegian banks to offer the general level of deposit guarantee (100 000 euro) to depositors residing outside Norway.

From our representative in Brussels, I have learned that the Polish presidency has asked for a clarification of the different EU countries’ views on the various unresolved issues regarding this directive, including whether the countries can accept the proposal from the ECON Committee for Article 5.3a. I hope that the UK will accept that Article 5.3a becomes part of the final directive, and that this position will be communicated to the Polish presidency.

Yours sincerely,

Sigbjørn Johnsen