Recital (42)

Directive 2014/59/EU partially harmonised the ranking of deposits under national laws governing normal insolvency proceedings. Those rules provided for a three-tier ranking of deposits, whereby covered deposits had the highest priority ranking, followed by eligible deposits of natural persons and of micro, small and medium-sized enterprises above the coverage level. The remaining deposits, namely the deposits of large corporates exceeding the coverage level and deposits that are not eligible for repayment by the DGS, were required to have a lower priority ranking, but their position was not otherwise harmonised. Finally, the claims of DGSs benefitted from the same higher priority ranking as covered deposits. Nevertheless, that partial harmonisation has not proved to be the optimal solution for depositor protection. Partial harmonisation has created differences in the treatment of remaining depositors across the Member States, in particular as an increasing number of Member States have decided to also grant a legal preference to remaining deposits. Those differences have also created difficulties when determining the insolvency counterfactual for cross-border groups during the resolution valuations. Furthermore, the lack of general depositor preference has had the potential to create problems regarding compliance with the no creditor worse off principle, particularly when the deposits the priority of which has not been harmonised by Directive 2014/59/EU are ranked at the same level as senior claims. Therefore, the ranking of deposits in the current hierarchy of claims should be amended.