A note on the adequacy of the EU scheme for bank recovery, resolution and deposit insurance in Spain

Pilar Gómez-Fernández-Aguado, Antonio Partal-Ureña and Antonio Trujillo-Ponce
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Pilar Gómez-Fernández-Aguado: Department of Financial Economics and Accounting, Universidad Pablo de Olavide
Antonio Partal-Ureña: Department of Financial Economics and Accounting, Universidad Pablo de Olavide

Journal of Banking Regulation, 2016, vol. 17, issue 4, No 6, 332-337

Abstract: Abstract This article analyzes whether the funds set by the recent EU directives on bank resolution and deposit insurance to create a safer and sounder financial sector (that is, 1 and 0.8 per cent of covered deposits, respectively) are adequate to cover unexpected losses for the Spanish banking system. By applying a framework based on the foundation internal ratings-based approach established in Basel Capital Accords, we find that the fixed target levels proposed by the EU bank rules would not ensure the highest credit quality for a bank resolution and deposit insurance Fund in Spain. Nevertheless, these resources would be sufficient to ensure a good solvency level for the Fund, equivalent to an AA S&P rating in 2013.

Keywords: deposit insurance system; resolution funds; capital adequacy; internal ratings-based approach (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1057/jbr.2015.29

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