What does CSSF's "Circular CSSF-CPDI 25/48" change?

- Modified Contribution Formula: Replaces prior methods (e.g., from Circulars CSSF-CPDI 16/01, 17/06, 20/21) with a new structure: Component 1 proportional to covered deposits growth (Γ_{j,k}) at 0.8% base rate, plus a flat add-on (T_j D_{j-2,k}) for target shortfalls, adjusted by a uniform factor μ per compartment, and multiplied by a new risk adjustment factor (ARW_{j,k}). - Risk Adjustment Introduction: ARW is calculated using a weighted score (minimum 75% on EBA core categories, plus 12.5% deposit-size risk and 10% others) from indicators like leverage ratio (bounds 3-9%), capital coverage (100-200%), LCR/NSFR (100-200%), NPL ratio (0-3%), RWA/total assets (0-100%), ROA (0-2% or 2-10%), and unencumbered assets/covered deposits (100-200%). Scores convert to factors where lower risk yields ARW 1 (increases). - Merger/Transfer Handling: For failed/merged institutions, contributions are redistributed proportionally to receiving institutions' deposit increases, capped by their own required amounts; no positives added if the original can pay. - Floor and Alignment: Introduces max(0, A_{j,k}) floor to avoid negative components; ensures EBA compliance, simplicity, and risk sensitivity.

Primary: FGDL member institutions (Luxembourg credit institutions/banks holding covered deposits), as they must pay adjusted annual contributions based on deposits, growth, and risk profiles. Secondary: CSSF-supervised firms involved in deposit-taking; receiving institutions in mergers/transfers; FGDL for invoicing and administration.

What should firms consider doing?

Data Reporting: Submit accurate covered deposits data (e.g., as of 31 Dec 2025 per Circular 25/49) and risk indicator metrics (leverage, LCR, NSFR, NPL, etc.) to FGDL/CSSF for ARW calculation; prepare for annual surveys like CPDI 25/45 (31 Mar 2025 snapshot). Internal Calculations: Model contributions using new formula C_{j,k} = ARW_{j,k} * max(0, max(A_{j,k}) + T_j D_{j-2,k}) * μ; forecast based on historical deposits (D_{j-2,k}) and growth. Risk Monitoring: Track and improve key metrics (e.g., reduce NPLs below 3%, maintain LCR/NSFR >100%) to minimize ARW >1; review merger impacts. Payment: Pay FGDL invoices reflecting uniform rates per compartment, risk-adjusted amounts. Systems Update: Adapt finance/compliance systems for new inputs; align with EBA risk guidelines (https://www.eba.europa.eu/regulation-and-policy/single-rulebook/interactive-single-rulebook/1085).

🇱🇺 CSSF Guidance high

Circular CSSF-CPDI 25/48

Published 13 November 2025 | Luxembourg

AI Analysis

Circular CSSF-CPDI 25/48 updates the methodology for calculating ex-ante annual contributions to the Fonds de garantie des dépôts Luxembourg (FGDL), Luxembourg's deposit guarantee scheme, specifically for the target levels in Articles 179 and 180 of the Law of 18 December 2015 on the failure of credit institutions and certain investment firms. This matters because it introduces a risk-adjusted contribution model aligned with EBA Guidelines, shifting from purely deposit-based calculations to ones incorporating institution-specific risk factors, potentially increasing contributions for higher-risk banks while promoting stability in the scheme's funding.

Key dates

13 November 2025: - Circular publication date by CSSF
31 December 2025: - Reference date for covered deposits survey (per related Circular CSSF-CPDI 25/49)
2026: - First application year for new methodology (contributions for year j=2026 based on j-1=2025 data; invoices issued by FGDL)

Suggested considerations

Data Reporting: Submit accurate covered deposits data (e.g., as of 31 Dec 2025 per Circular 25/49) and risk indicator metrics (leverage, LCR, NSFR, NPL, etc.) to FGDL/CSSF for ARW calculation; prepare for annual surveys like CPDI 25/45 (31 Mar 2025 snapshot).
Internal Calculations: Model contributions using new formula C_{j,k} = ARW_{j,k} * max(0, max(A_{j,k}) + T_j D_{j-2,k}) * μ; forecast based on historical deposits (D_{j-2,k}) and growth.
Risk Monitoring: Track and improve key metrics (e.g., reduce NPLs below 3%, maintain LCR/NSFR >100%) to minimize ARW >1; review merger impacts.
Payment: Pay FGDL invoices reflecting uniform rates per compartment, risk-adjusted amounts.
Systems Update: Adapt finance/compliance systems for new inputs; align with EBA risk guidelines (https://www.eba.europa.eu/regulation-and-policy/single-rulebook/interactive-single-rulebook/1085).

What changed

- Modified Contribution Formula: Replaces prior methods (e.g., from Circulars CSSF-CPDI 16/01, 17/06, 20/21) with a new structure: Component 1 proportional to covered deposits growth (Γ_{j,k}) at 0.8% base rate, plus a flat add-on (T_j D_{j-2,k}) for
Risk Adjustment Introduction: ARW is calculated using a weighted score (minimum 75% on EBA core categories, plus 12.5% deposit-size risk and 10% others) from indicators like leverage ratio (bounds 3-9%), capital coverage (100-200%), LCR/NSFR (100-200
Merger/Transfer Handling: For failed/merged institutions, contributions are redistributed proportionally to receiving institutions' deposit increases, capped by their own required amounts; no positives added if the original can pay.
Floor and Alignment: Introduces max(0, A_{j,k}) floor to avoid negative components; ensures EBA compliance, simplicity, and risk sensitivity.

Compliance impact

Urgency: High - Affects 2026 contributions directly, requiring immediate data readiness and modeling by Q1 2026; non-compliance risks penalties, inaccurate payments, or higher costs from poor risk scores. Matters for capital planning as riskier profiles face uplifts, emphasizing proactive risk management amid EU harmonization.

Who is affected

Primary: FGDL member institutions (Luxembourg credit institutions/banks holding covered deposits), as they must pay adjusted annual contributions based on deposits, growth, and risk profiles.
Secondary: CSSF-supervised firms involved in deposit-taking; receiving institutions in mergers/transfers; FGDL for invoicing and administration.

Prior Circulars
cssf-cpdi-20-21/).1
EBA Guidelines
based ex-ante contributions (EBA/GL/2015/13 on DGS metrics; https
Related CSSF Publications
CPDI 25/49 (13 Nov 2025) on 31 Dec 2025 covered deposits survey (https

References

AI-generated analysis. May contain errors or omissions — verify with the original CSSF source before acting. Full disclaimer.

What the CSSF said

Fonds de garantie des dépôts Luxembourg (FGDL) – Method for calculating the ex-ante contributions pursuant to Article 182 of the Law of 18 December 2015 on the failure of credit institutions and of certain investment firms

Published by CSSF . Read the full notice at the source for the authoritative text.

Sectors

Banking & Credit

Topics

Prudential / Capital Requirements

Relevant Firm Types

Bank

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