Definition of retail deposits with higher outflow rate

A methodology for the identification of retail deposits subject to higher outflow rates is described in Article 25 of the Delegated Regulation (EU) 2015/61. In this regard an institution should look at similar products in other institutions with comparable business model and size in its local deposit market and assess whether or not it applies significant higher return than its peers do on average. This assessment should be conducted by the institution itself and verified by the competent authority if necessary. The condition in Article 25(2)(c)(i) of the Delegated Regulation (EU) 2015/61 should not be considered to be met where an institution offers a deposit product which is not similar to any other in the market since the deposit cannot strictly be considered to be rate-driven in the context of such provision. Again the cited verification by competent authority applies if necessary.   Note: This Q&A (originally published on 13 May 2016) has been amended on 27 April 2018 to reflect that Guidelines on retail deposits subject to different outflows for purposes of liquidity reporting under Regulation (EU) No 575/2013 were repealed. Previous answer: A methodology for the identification of retail deposits subject to higher outflow rates is described in the Delegated Regulation (EU) 2015/61. Further explanation of the risk factors listed there and considered for such identification can be found in the EBA Guidelines EBA/GL/2013/01 on retail deposits subject to different outflows for purposes of liquidity reporting under Regulation (EU) No 575/2013, on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Capital Requirements Regulation 13 CRR). In this regard an institution should look at similar products in other institutions with comparable business model and size in its local deposit market and assess whether or not it applies significant higher return than its peers do on average. This assessment should be conducted by the institution itself and verified by the competent authority if necessary. The risk factor envisaged in Article 25(2)(c)(i) of the Delegated Regulation (EU) 2015/61 should not be considered to be met where an institution offers a deposit product which is not similar to any other in the market since the deposit cannot strictly be considered to be rate-driven in the context of such provision. Again the cited verification by competent authority applies if necessary.