Annex 1 – Method for identifying x for calculating minimum contributions

The following method describes how to identify ‘ x ’ to calculate the contribution rate of the minimum contribution according to paragraph 72b.

First, the DGS should rank all member institutions in increasing order by the product of their ARW and covered deposits 𝐴𝑅𝑊 𝑖 ∗𝐶𝐷 𝑖 . The order of their rank is described by the index ‘ r ’ . The member institution with the smallest 𝐴𝑅𝑊 𝑖 ∗𝐶𝐷 𝑖 has rank r=1 and the member institution with the highest 𝐴𝑅𝑊 𝑖 ∗𝐶𝐷 𝑖 has rank r=n.

Second, for each member institution, the DGS should calculate separately the interim contribution 𝑖𝑛𝑡𝑒𝑟𝑖𝑚𝐶 𝑟 according to the following formula:

𝑝𝑒𝑟𝑖𝑜𝑑𝑖𝑐 𝑡𝑎𝑟𝑔𝑒𝑡 𝑙𝑒𝑣𝑒𝑙−(𝑟−1)∗𝑀𝐶 𝑖𝑛𝑡𝑒𝑟𝑖𝑚𝐶 𝑟 = ∑ 𝑛 𝑖=𝑟 𝐴𝑅𝑊 𝑖 ∗𝐶𝐷 𝑖 ∗𝐴𝑅𝑊 𝑟 ∗𝐶𝐷 𝑟

Third, the DGS should compare the 𝑖𝑛𝑡𝑒𝑟𝑖𝑚𝐶 𝑟 of each member institution with the minimum contribution MC. It should then count the number ‘ x ’ of institutions that should only pay the minimum contribution MC, i.e. whose 𝑖𝑛𝑡𝑒𝑟𝑖𝑚𝐶 𝑟 ≤ 𝑀𝐶 .

Fourth, the DGS should apply the identified number ‘ x ’ of institutions paying the minimum contribution in the formulas in paragraph 72b.