Newsletter Issue No. 4, April 2016

MESSAGE FROM THE CHAIRMANDear EFDI Members,

Welcome to

this year‘s first

edition of the

EFDI Newsletter,

with many

interesting con-

tributions and

news from our

membership.

I would like to take this opportunity for a

quick update on EFDI‘s internal activities.

As previously announced, the 2016 EFDI

AGM & International Conference wil be

hosted by the Lithuanian Deposit and

Investment Insurance from 28th Septem-

ber to 1st October 2016. A delegation of

the EFDI Board visited Vilnius in March

for an inspection of the facilities and first

discussions regarding the program with

Aurelija Mazintiene, Director of the

LIthuanian DGS.

We experienced a very warm welcome

and witnessed the excellent and highly

professional preparations for the mee-

ting. The Board will convene in Berlin on

12th of May to continue its work on the

agendas of the meetings, among others.

We hope to provide you with further

information regarding registration,

logistics and program shortly and expect

to see many of you in the beautiful town

of Vilnius this fall.

As you may hav noted, the Steering

Group recently held a consultation on

the proposed draft amendments to

the EFDI Statutes. Following its closure,

the Steering Group Chairman Joseph

Delhaye is currently in the process of

analysing its results, which will then

be discussed and incorporated in draft

amendments by the Steering Group.

It is foreseen to present the revised

amendments within the framework of

the annual events in Vilnius.

Finally, I would like to kindly remind you

of the upcoming EFDI EU Committee

Meeting in Vienna on 23rd July and the

PR Committee in London on 13th June.

We hope to see many of you at these

meetings.

I want to conclude by thanking all mem-

bers who contributed to this newsletter.

Your

Dirk Cupei

IN THIS ISSUE

News from Members 2

First tripartite Memorandum of Understanding signed in Switzerland 2

Bank Deposit Guarantee Fund (FGDB), Romania 2

FGD Successfully participantes in call for papers by the JEEH 3

Update from the Czech Deposit Insurance Fund 4

FITD updates 5

FSCS and introduction of risk-based levies for the deposit sector 7

Transposition of Directive 2014/49/EU in Greece 8

German Report on cooperation agreements and someone called Eddies 9

Investor Protection Fund of Hungary (IPFH) 10

Field report 11

Resolution Fund of Hungary (RFH) 11

Cyprus Deposit Guarantee Scheme Activation 11

Romanian Investor Compensation Scheme 2016 12

Resolution of Credit Institution “Cooperative Bank of Peloponnese Coop. LTD” 12

Maple Bank GmbH – Compensation Case 3

Events and Meetings 15

3rd EFDI Balkan Region Meeting 10-12 March 2016, Zlatibor (Serbia) 15

Turning disadvantage into advantage - Communicators’ meeting in Istanbul 16

FOR YOUR DIARY

May

12.05. EFDI Board Meeting, Berlin,

Germany

26.05. IADI ERC International

Conference „Diversity and

Harmonization of Deposit

Insurance“, Paris, France

June

13.06. EFDI PR Committee, London,

UK

23.06. EFDI EU Committee, Vienna,

Austria

September

28.09.- EFDI Annual Meeting &

1.10. International Conference,

Vilnius, Lithuania

2

News from Members

FIRST TRIPARTITE MEMORANDUM OF UNDERSTANDING SIGNED IN SWITZERLAND

At the end of last year, the heads

of the Swiss Deposit Protection

of Banks and Securities Dealers

esisuisse, the Albanian Deposit

Insurance Agency (ADIA) and

the Deposit Insurance Fund of

Kosovo (DIFK) signed a “Tripartite

Memorandum of Understanding”

at the embassy of the Republic of

Albania in Bern, Switzerland.

Patrick Loeb, Chief Executive

Officer of esisuisse, stated that

finances have become a global

business.

“International contacts are

therefore most vital for us, and

we are proud to have signed the above

mentioned MoU. It gives us access to

important pieces of information for our

international activities and enables us to

lead a most fruitful dialogue with repre-

sentatives of the respective countries”,

he added.

Genci Mamani, ADIA General Director,

stressed that this Memorandum was an

important step in the Agency’s continu-

ed efforts in increasing cooperation with

thomologous deposit insurers. “The Me

morandum”, he said, “aimes at strengt-

hening human capacities and improving

the deposit insurance schemes in

line with best international stan-

dards”.

The Managing Director of DIFK,

Violeta Arifi Krasniqi, appreciated

the signing of the MoU and the

cooperation institutionalised in this

context. “This leads to constant

improvement of our institutions

by adopting global best practice

standards.”

Furthermore, the signing was

applauded by other guests, who

valued the importance of deposit

insuring institutions in protecting

and strengthening financial stabi-

lity. Gail Verley, Secretary General

of the International Association

of Deposit Insurers, pointed out that

the tripartite MoU in question was the

first of its kind under the auspices of

the International Association of Deposit

Insurers.

Posing for a picture after signing the tripartite MoU in Switzerland are (from left to right) Genci Mamani, General Director Albanian Deposit Insurance Agency, Gail Verley, Secretary General IADI, Violeta Arifi Krasniqi, Managing Director Deposit Insurance Fund of Kosovo, Eliverta Radomi, Counsellor Embassy of the Republic of Al-bania, Mustafë Xhemaili, Chargé d’Affaires a.i., Embassy of Kosovo, Patrick Loeb, CEO esisuisse, Martin Blushi, Coordinator Albanian Deposit Insurance Agency

BANK DEPOSIT GUARANTEE FUND (FGDB), ROMANIA The European

Directives’

provisions

on deposit

guarantee schemes and on recovery

and resolution of credit institutions and

investment firms have been implemen-

ted into Romanian legislation through

two Laws. Both Laws have entered into

force on December 14, 2015.

Beside its traditional „pay-box” function,

the Fund may carry out the activity of:

• administrator of banking resolution

fund,

• interim or special administrator for

a credit institution in resolution

and, as the case may be, sharehol-

der of a bridge bank or of an asset

management vehicle,

• sole liquidator, if the National Bank

of Romania withdraws the license

of a credit institution and takes the

measure to order the dissolution

followed by liquidation of the

respective credit institution or in

the case the liquidation is decided

by the shareholders of the credit

institution.

Since 2016, FGDB collects contributions

from member banks on a risk-based

assessment.

At present, FGDB is in process of

drawing up the related secondary

regulations and bringing clarifications

to the member credit institutions. In this

regard, a meeting with them took place

in January at FGDB’s premises.

Two regulations have been issued at the

beginning of 2016: regarding the risk

based contributions and, respectively,

the reporting requirements to FGDB.

In December 2015, FGDB awarded the

winner of the fourth edition of the Cos-

tin Murgescu Contest for Economic Re-

search – the essay “Emigration impact on

the Romanian economy in the context of

the most recent economic and financial

crisis”. The contest encourages new ideas

in macroeconomics, cross-disciplinary

analysis of phenomena seeking financial

and economic stability while promoting

Romanian students’ research and profes-

sional development.”

3

FGD SUCCESSFULLY PARTICIPANTES IN CALL FOR PAPERS BY THE JOURNAL OF EUROPEAN ECONOMIC HISTORY

The

economic

analysis

and

international relations team of the

Fondo di Garanzia dei Depositanti

of Italian BCCs (FGD) – composed

by its Director, Roberto Di Salvo,

Marcello Bredice and Francesco

Baldi – has conducted a study

entitled “Back to the Future”: Bank

Crisis Management Practices

in Italy (1978-2015) and Their

Perspectives in the Italian Cooperative

Credit Network. The study represents the

FGD’s response to the “call for papers”

launched by The Journal of European

Economic History (www.jeeh.it), an

international academic review founded

by the prominent economy historian

Luigi De Rosa in 1972 and distributed in

about 50 countries worldwide.

The special issue of the Journal will be

presented during a workshop, entitled

“From the Financial Crisis to the Banking

Union. Perspectives from Economic

History”, held at the Italian Banking Asso-

ciation (ABI)’s premises on April 12 2016.

The FGD’s article will be distributed to

EFDI members via email as soon as it will

be released. A brief abstract of the study

follows.

Bank recovery and resolution practices

so far applied have shown strong limits

in the aftermath of the 2007-2008 global

financial crisis. The new EU legislation

concerning bank crisis management is

intended to challenge such practices.

The Italian Cooperative Credit (CC)’s

pioneering experience of the Guarantee

Central Fund (FCG) - established on a

voluntary basis in 1978 in line with the

spirit of mutuality shared by the credit

cooperation movement across Europe

since the late 1800s- allows to gather

important lessons on how to re-concep-

tualize and re-design the financial safety

net of a small banks’ network within the

Banking Union. Past research has shown

that a private sector-approach to deposit

insurance can function better than a go-

vernment-based one, preventing

moral hazard behaviors of small

member banks and the adverse

effects of their failures on the

economic output of associated

communities. The ex-ante self-fi-

nancing mechanism implemented

by FCG to support Cooperative

Credit Banks (CCBs) successfully

avoided depositors pay-outs,

further disbursements by member

banks, and pro-cyclical effects

on local economies. Overall, the

Italian CC financial safety net enabled

the market exit of 400 CCBs over the last

40 years without any failures, contagion

spillovers to the country’s economic

system or societal value destruction. Two

key lessons that, among others, can be

drawn are that (a) a sectoral DGS should

better serve as a “risk-minimizer” so as

to reduce the likelihood and amount of

losses for member banks; (b) cohesiven-

ess produces high economic and social

returns at both micro and macro levels.

Conclusively, the fruitful results of the

above experience should be contrasted

with the consequences of small banks

failures in the U.S. market and the huge

amount of State Aids granted worldwide

during the recent global financial crisis.

FGD team members Roberto Di Salvo, Marcello Bredice and Francesco Baldi

News from Members

4

News from Members UPDATE FROM THE CZECH DEPOSIT INSURANCE FUNDThe Deposit Insurance Fund, Czech

Republic has been transformed into

Financial Market Guarantee System

On 1 January

2016, the

acts transpo-

sing DGS Di-

rective and Bank Recovery and Resoluti-

on Directive came into force in the Czech

Republic. Under these acts, the Deposit

Insurance Fund has been transformed

into the Financial Market Guarantee

System with aim to have a more

comprehensive system to protect

depositors and promote stability

on the financial market. The Gua-

rantee System takes over the role

and all responsibilities of former

Deposit Insurance Fund and it

also administers newly formed

Crisis Resolution Fund, which can

be used for the potential future

resolution of financial institution

crises.

The Guarantee System will be a more

stable and robust institution with wider

range of powers to significantly reduce

the risk of financial institution failure.

The existence of the Guarantee System

will also ensure better coherence with

the Czech National Bank (that has the

role of resolution authority) and the Mi-

nistry of Finance of the Czech Republic.

The Guarantee System has two mana-

ging authorities:

A five-member Board of Directors, re-

sponsible for strategic decisions, whose

members are:

• Mr. Dusan Hradil – chairman (Mi-

nistry of Finance)

• Mr. Karel Bauer – vice-chairman

(Czech National Bank)

• Mr. Ondrej Landa – member (Minist-

ry of Finance

• Mr. Radek Urban – member (Czech

National Bank)

• Mr. Josef Tauber – member (Czech

Banking Association)

A three-member Management Board,

responsible for day-to-day agenda

and communication with third parties,

whose members are:

• Ms. Renata Kadlecova – chairperson

• Mr. Tomas Hejduk – member

• Mr. Roman Kahanek – member

Other significant changes brought by

the transposition of the DGS Directive

are:

• temporary high balances are

protected (insured up to additional

100 000 EUR for 3 months after the

amount has been credited or after

the moment when such deposits

become legally transferable),

• deadline for the commencement

of deposit compensation will be

shortened (from 1 June 2016 the

deadline will be 7 working days),

• deposits of local authorities with an

annual budget not exceeding EUR

500 000 remain protected.

These changes provide clients more re-

liability in the deposit insurance protec-

tion system and more flexible access to

their deposits during the reimbursement

process if any financial institution fails.

More information is available at the

website: www.gsft.cz (transferred to

former DIF site – new web site is under

preparation).

The EFDI EU Committee Meeting in

Pilsen, Czech Republic, 24-25 Febru-

ary 2016

Another EFDI EU Committee Meeting

was held in Pilsen in February 2016. The

meeting was opened by Mr. Urban´s

presentation of the Czech Resolution

Regime followed by other in-

teresting topics such as European

Deposit Insurance Scheme – EDIS

(presentation of the latest version

of the document drafted by the

EFDI Banking Union Working

Group), H2C Home/Host Agree-

ments, Stress Tests and many

others. United Kingdom shared

their experience with limit change

and Italy presented results of their

recent interventions affected by state aid

issues.

EFDI ON WIKIPEDIA

The English entry about EFDI on

Wikipedia was recently updated

and approved by the Wikipedia

adminstrators. In order to make

information about EFDI available

in other languages, we would like

to kindly ask for your support in

preparing a version in your local

language based on the English

version.

Please contact secretariat@efdi.

eu for further information and as-

sistance.

5

News from Members

5

FITD UPDATESIn Italy

the BRRD

and the

DGSD

have been recently implemented into

the national legislation:

• the BRRD with the legislative

decrees n.180 and n.181 of 16 No-

vember 2015; one legislative decree

to implement BRRD and the other

to make all relevant amendments to

the Banking Law.

• the DGSD with the legislative

decree n. 30 of 15 February 2016.

Even before the implementation of the

DGSD, FITD started analysis of various

issues resulting from the new rules,

which would have impacted on FITD

organization and activity. In particular:

1. In November 2015 FITD amended

its Statutes to anticipate the new

ex-ante system imposed by the

DGSD. The decision to anticipate

the switch to ex-ante funding was

taken by the Fund in order to begin

raising contributions soon in 2015.

And in December 2015 FITD raised

the contribution for 2015 according

to a funding plan aimed at reaching

the target-level of 0.8% by July

2024.

2. Also, extraordinary contributions

have been introduced with other

funding sources and mutual borro-

wing between DGSs.

3. The ways of investment of available

resources in low risk and appro-

priately differentiated have been

regulated also. To this end, FITD has

signed a correspondent banking

services agreement with the Bank

of Italy. Investments are made on

the basis of the investment policy

and asset allocation decided by the

Fund.

4. In addition to the new funding

mechanism, already introduced, the

SCV project is being finalized.

5. Also, EBA guidelines on risk based

contributions are being implemen-

ted. FITD is making all changes

necessary to its current risk-based

contribution system to comply with

the new rules. FITD sent its con-

tribution to the EBA consultation

on draft guidelines on stress tests,

which DGS will have to carry out on

their systems pursuant to DGSD.

6. An important innovation in FITD

Statutes is the introduction of a

voluntary scheme of intervention. It

is completely separate and has au-

tonomous governance and resour-

ces with respect to the mandatory

scheme. This voluntary instrument

of FITD aims at performing support

measures for its Member banks,

without raising any State aid

concerns. FITD is now engaged in

the enhancement of the Statutes of

the Voluntary Fund: amendments

were approved at the FITD Extraor-

dinary Assembly of 20 January and

others will be approved at the FITD

Ordinary Assembly scheduled on 30

March 2016.

7. FITD will soon launch its new web-

site. The website, which is in Italian

and English, underwent a substan-

tial revision to render it more “user

friendly” for depositors.

8. The website is and will continue

vto be a major instrument for

communication with depositors

in line with Art 16, par. 3 of DGSD

which sets significant importance

on communication of essential

information for depositors through

DGS websites.

-----------

In 2015 FITD carried out an intense

activity for the preparation of three

support interventions. The intervention

were decided in favour of member banks

in special administration, according to

the requirements of the Statute and in

compliance with the new framework on

bank recovery and resolution.

The three interventions would have

been carried out in the form of the

acquisition of equity interests, together

with the application of burden sharing,

ie., the write-down and conversion of

subordinated debt into capital.

In the opinion of the European Commis-

sion, FITD interventions in favour of the

banks would have been qualified as a

State Aid.

Subsequently, four banks were put

in resolution on 22 November 2015,

without FITD intervention (the fourth

bank had been added by the Resolution

Authority). The operation was conducted

with application of burden sharing and

transfer of businesses to four bridge

banks. A good-bank-bad bank separati-

on tool was also applied.

-------

On 22 January 2016 FITD organized a

Seminar on Banking Crisis Management

and Deposit Guarantee in the Banking

Union framework.

(see next page)

6

FITD UPDATES (CONT‘)Major issues resulting from the new

were debated, with contributions from

representatives of institutions, banks

and Academia. institutional and regula-

tory framework.

The seminar comprised an introduc-

tion session and three other in-depth

sessions focusing respectively on

recovery plans, resolution and the use of

DGS in the new toolkit for banking crisis

management.

On 11-12 February 2016 FITD organized

in Turin:

• the 2016 ERC Annual Meeting;

• the Workshop on IADI-FSB Core

Principles for Effective Deposit

Insurance Systems; and

• International Conference on “Pre-

venting and Resolving Bank Crises

in the European Banking Union and

Depositor Protection”.

The Conference was split into 3 Panel

Discussions:

1. The European Banking Union:

What‘s done and next steps

2. Resolving Bank Crises: Preparation

and the Use of Resolution Tools

3. DGS role in Resolving Bank Crises.

Representatives from major European

Authorities (EBA, SRB and ECB) opened

discussion in the first panel with a frank

exchange of views. In the other two

panels, speakers from Resolution Autho-

rities, Central Banks, European Commis-

sion, DGSs and others, presented their

experiences and difficulties in dealing

with the new European Framework for

Banking Crisis Management.

On 11 March, FITD welcomed a Japanese

delegation from the Deposit Insurance

Corporation of Japan (DICJ). The three

Japanese representatives indicated

topics they wished to discuss:

1. Current situation after the transpo-

sition of the recast DGSD and BRRD

in Italy

2. Supposed changes in the roles of

the deposit insurer with EU regulati-

ons/directives

3. Financing of Deposit insurance fund

(the procedure of levy, setting the

target and premium rates)

4. Engagement with the procedure of

Resolution

5. Coordination within the EU (DGS,

Resolution, EDIS)

FITD is currently engaged in:

• CP self-assessment;

• Coordination of the two ERC Sub-

groups (Relations between DGSD

and CPs and State Aid Rules and

DGS Interventions);

• Drafting of the Survey for the Third

Interim Report on DGSD Transposi-

tion. When ready it will be sent to all

EU DGSs through the EFDI Secreta-

riat to monitor DGSD implementati-

on in EU and its effects on DGSs;

• H2C initiatives and meetings;

• Leadership of the Banking Union

Working Group: the first draft paper

on “Preliminary views on EDIS”

prepared by the BUWG has been

submitted to EU Committee. The

EU Committee Coordinator is now

collecting feedback from Members

(deadline 31 March 2016).

• in the IADI Subcommittee on

Resolution Issues for Financial

Cooperatives (SRIFC)

News from Members

FYI: 2ND EXCHANGE OF VIEWS AND HEARING ON EDIS IN ECON COMMITTEE

On 7th April 2016 a second exchange

of views on the European Commis-

sion‘s proposal for a European Deposit

Insurance Scheme took place in the

European Parliament‘s ECON Commit-

tee. The video stream is available at

the ECON Committee website.

The exchange of views was continued

on 19th April 2016, the video stream

of which can also be found at the

ECON website.

Moreover, the ECON Committee will

hold a public hearing on EDIS, which

is planned for 23rd/24th May. Please

check the ECON events page for the

schedule.

7

News from Members

7

FSCS AND INTRODUCTION OF RISK-BASED LEVIES FOR THE DEPOSIT SECTOR On 4 March

2016 the

Prudential

Regulatory

Authority (PRA) published a consultation

paper “Implementing risk-based levies

for the Financial Services Compensation

Scheme deposits class – CP7/16”.

The proposed rules advance the PRA’s

general objective by establishing a

sound funding framework for the FSCS

and thereby minimise the adverse effect

that the failure of a PRA-regulated firm

could be expected to have on the stabi-

lity of the UK financial system. A sound

funding framework for the FSCS also

enhances depositor confidence in the

compensation scheme and therefore;

contributes to financial stability.

PRA rules in the Depositor Protection

Rulebook currently require the FSCS

to calculate firm levies solely on the

basis of covered deposits. Article 13 of

the recast Deposit Guarantee Schemes

Directive (DGSD) requires that contri-

butions to Deposit Guarantee Schemes

(DGSs) should additionally be adjusted

for the degree of risk incurred by each

DGS member. The European Banking

Authority (EBA) has issued guidelines

to specify methods for calculating such

contributions, as required by Article

13(3) of the DGSD. The PRA is setting out

its proposed methodology towards the

calculation of such risk-based levies that

would apply to the repayment of both

future compensation costs and existing

legacy costs incurred by the FSCS. This

CP proposes:

• amendments to the rules governing

the funding of the FSCS in Chapters

34, 49 and 42 of the Depositor

Protection Part that would require

the FSCS to adjust compensation

cost levies for the degree of risk

incurred by a DGS member. These

would take effect from the 2017

levy cycle;

• amendments to rules in Chapter

36 of the Depositor Protection

Part requiring the FSCS to similarly

risk-adjust legacy costs levies*; and

• a new statement of policy,

specifying how the PRA intends to

calculate the degree of risk incurred

by a DGS member. Levies for all

deposit-takers would be risk-based,

but the PRA proposes different

calculation methodologies for Capi-

tal Requirements Regulation (CRR)

firms, credit unions and non-EEA

branches due to their different legal

and supervisory regimes.

The consultation closes on 3 June 2016

and CP7/16 is available on the PRA web-

site - http://www.bankofengland.co.uk/

pra/Documents/publications/cp/2016/

cp716.pdf.

* legacy costs levies cover interest and ca-

pital repayment costs in respect of 2008/09

banking crisis and FSCS borrowing from

HM Treasury.

FYI: ECB CONSULTS ON INSTITUTIONAL PROTECTION SCHEMES

In February 2016, the European

Central Bank opened a public consul-

tation on the ECB’s approach for the

recognition of institutional protection

schemes (IPS) for prudential purposes.

Until 15th April 2016, interested parties

were invited to submit their com-

ments, which will be made publically

available following the conclusion of

the consultation along with a feed-

back statement. In addition, a public

hearing was held in Frankfurt on 30th

of March. All relevant documents and

background information including a

web podcast of the hearing can be

found at the ECB website.

8

News from Members

8

TRANSPOSITION OF DIRECTIVE 2014/49/EU IN GREECE

On March 7th, 2016, the Greek law

transposing Directive 2014/49/EU, law

4370/2016 (Government Gazette 37 A’ /

07.03.2016) came into force. Apart of the

mandatory provisions, which were all

transposed, the manner of transposition

of the following national discretions

might be of some interest:

• Temporary High Balances (THB):

THB limit is set at 300,000 euro

for up to six months from the

day when each relevant amount

has been credited. All activities

except marriage are covered, with

the additional requirement that

deposits resulting from divorce and

insurance benefits must exceed

3,000 euro per deposit to be

covered. Two further requirements

have been added: (a) that the credit

of the amount to the account must

take place within a month from

the date on which the respective

activity took place or otherwise

provide proof that the amount

arises from the covered activity and

(b) that depositor request must be

filed within three months from the

date of failure. It is also provided in

the legislation that, in the case of a

joint account, the limit of 300,000

euro applies for the benefit of all

co-beneficiaries, irrespective of the

depositor or the beneficiary con-

cerned by the relevant credit, and

to the total balance of the account

once the coverage limit of 100,000

has been used up.

• Repayment period: A repayment

period of seven working days has

been adopted.

• Currency of repayment: The cur-

rency of repayment is the currency

of the member state where the

account is located.

• Set-off: When calculating the

repayable amount, the credit

balances of deposit accounts are

set off against all manner of coun-

terclaims of the credit institution

against the depositor, insofar and to

the extent that they have become

due and payable on or before the

date of failure.

• Deadline on validity of repayment

claims: A five (5) – year deadline has

been set for the validity of repay-

ment claims

• Third-country branches: Third

country branches in Greece are

required to join TEKE provided that

they are not already covered by

an equivalent deposit insurance

system.

• The provisions on borrowing bet-

ween DGSs, coverage of personal

and occupational pension schemes

and local authorities, old age

provision products and pensions,

and alternative measures, have not

been transposed into the Greek

legal framework.

• Expenses: In addition to the provi-

sion transposing Directive 2014/49/

EU, the new TEKE law provides

that the Funds’ expenses will be

collected by separate contributi-

ons to credit institutions and will

be split into two categories: The

operating expenses, which relate

to the day-to-day operations of the

Fund and are apportioned to credit

institutions primarily on the basis

of their size (proportional partici-

pation in annual contributions of

Deposit Cover Scheme, Investment

Cover Scheme and Resolution

Scheme) and the expenses that

relate to the payout / resolution of a

specific credit institution, which are

primarily attributed to said credit

institution under liquidation.

As a final point, according to the new

law, the new abbreviation of the Hellenic

Deposit and Investment Guarantee Fund

will be TEKE. The acronym HDIGF used

so far will gradually cease to being used.

Member surveys:

Several new member surveys‘ re-

sults have been posted on our in-

ternal website for download.

The most recent additions include:

• Backup Funding (DIA Serbia)

• Publication of information /

Payment methods and payout

timeframe (BDB Germany)

• Joint Accounts (Cyprus)

• Risk-based methodology 3rd

countries (TEKE Greece)

• Implementation DGSD Art. 12

(DIF Latvia)

You can find the survey folder in

the section „Publications“, EFDI

restricted documents.

We wish to thank all respondents

to the surveys for their valuable

input.

9

GERMAN REPORT ON COOPERATION AGREEMENTS AND SOMEONE CALLED EDDIES

One of the substantial changes brought

upon DGSs in the EU by the DGSD is the

requirement for cooperation between

DGSs in cross-border payout procedures.

In this respect, Article 14 of the DGSD

imposes an explicit obligation on each

DGS to enter into cooperation agree-

ments with other DGSs.

Since the passing of the transposition

date, i.e. the 3rd of July 2015, DGSs are

trying to determine how cooperation

between DGSs should be structured and

which requirements need to be met to

ensure a cross-border payout in a timely

manner and in line with the DGSD, the

respective national transposition law

and the Guidelines on cooperation

agreements between deposit guarantee

schemes under Directive 2014/49/EU

on 15 February 2016. At last, with the

publication of the Guidelines on coope-

ration agreements, it is now clear what

the minimum requirements from EBA‘s

perspective are.

In consideration of the complexity

of cross-border payout scenarios, in

particular if several DGSs are involved in

a specific payout, DGSs are working on

the challenging task to set up a contrac-

tual framework for such cooperation.

In particular, the H2C working groups

have been eagerly working on a draft

cooperation agreement, including the

technical specifications with regard to

the transfer of depositor related informa-

tion between DGSs.

In the meantime, on 11 September 2015

to be specific, the German statutory

deposit insurance scheme (EdB) entered

into bilateral agreements regarding

cooperation within the Union under

Article 14 of the DGSD with the Hellenic

Deposit and Investment Guarantee

Fund. We intent to enter into similar

agreements with the Austrian statutory

deposit insurance scheme for private

banks, i.e. the Einlagensicherung der

Banken & Bankiers GmbH soon and

will continue this process as we were

instructed by our supervisory authority

to have cooperation agreements in place

as soon as possible.

However, having the legal framework

in place is just one side of the „coopera-

tion coin“. All cooperation agreements

have in common that the exchange of

payment instruction files as well as any

other data related to a cross-border

payout procedure will have to be trans-

ferred in a secure and reliable manner.

Although, in theory, it may be concei-

vable to set up bilateral information

exchange systems via an SFTP structure,

the tight timeframe for cross-border

payouts set by the EBA renders bilateral

solutions impractical. In particular, set-

ting up SFTP servers and clients and the

administration and maintenance thereof

hardly fit into a complex payout scenario

in which time and efficiency are of the

essence. One just have to think about

the documents depositors may send to a

Host DGS in connection with temporary

high balances. These documents can be

very comprehensive and will have to be

archived and forwarded to the Home

DGS. Also, bilateral solutions will be

more challenging in stress testing.

Therefore, bearing in mind the variety

and number of DGSs involved, we are

of the opinion that a centralised data

exchange system would be the sole

technically and economically viable

solution. To this end, we are currently in

the process of finalising the details of

such a centralised exchange system. The

system will be provided by the Auditing

Association of German Banks (Prüfungs-

verband), the company which, inter

alia, has been providing payout related

services for us since 1969.

The intention is that this centralised

exchange system will not only be used

by us, but by several DGSs, making the

exchange of information easy, secure,

affordable, and reliable. The Auditing

Association of German Banks aims for

a launch of this system, which they

call European DGS to DGS Information

Exchange System (Eddies), within the

next couple of months. If everything

goes according to plan, Eddies shall be

presented to other DGSs in a short time.

Eddies will meet the requirements

stipulated by the DGSD and the EBA

Guidelines and we hope that many DGSs

will join this system. The more DGSs join

one system the easier life of DGSs will

be.

News from Members

10

INVESTOR PROTECTION FUND OF HUNGARY (IPFH) Organizational changes in NDIF and

IPFH

On September 15, 2015, the Board of

Directors of IPFH elected dr. Tibor Bog-

dan as the Chairman of the Fund for a

one-year term. Mr. Bogdan is a lawyer, a

senior advisor of the Minister of Justice,

and was nominated to be a member of

the Board of Directors of IPFH by KELER

Central Depository Ltd.

In July 2015, the Hungarian Parliament

passed a law according to which as of

January 1, 2016, IPFH would not have a

separate working organization; instead,

its operative tasks would be performed

by the working organization of NDIF. As

a result, on January 1, 2016, IPFH’s em-

ployees were transferred to NDIF. Under

the new regulation, IPFH continues to be

an independent guarantee fund legally

and financially, and continues to be

governed by its own Board of Directors

enlarged to the effect that it also include

members delegated by the Ministry for

National Economy.

Another important change of the new

law is that from January 1, 2016, the

customers of IPFH members have bec-

ome eligible to receive a compensation

not exceeding EUR 100,000, similarly to

bank depositors.

In 2015 October, first ever in its history,

IPFH accomplished a successful bond

issuance to refinance emergency

liquidity assistance (ELA) received from

the Central Bank of Hungary (CBH) in the

amount of HUF 83 billion (approximately

EUR 267 million). The ELA was necessary

for the IPFH to fulfill its statutory payout

obligations. The bonds were purchased

by a consortium of six players of the

Hungarian banking sector.

Payout Cases

Special compensation for Quaestor bold

holders

For the compensation of Quaestor bond

holders (case of the Quaestor Securities

has been reported in the Newsletter

No. 2., Augustus 2015) in March 2015, a

separate act been passed by the Hun-

garian Parliament, pursuant to which

clients would receive a compensation

up to HUF 30 million (approximately EUR

100,000) (the Queastor Act).

On November 17, 2015 the Hungarian

Constitutional Court (CC) declared

certain provisions of the Quaestor Act

unconstitutional. It was not the compen-

sation itself that the CC found unconsti-

tutional but that fact that the Queastor

Act defined the group of investors

entitled to receive compensation too

narrowly and in a discriminative manner.

At the end of 2015, the Hungarian

Parliament redrafted the Quaestor Act

to comply with constitutional requi-

rements, and established a new fund,

named Compensation Fund, with an

extended mandate to compensate the

clients of the Hungaria Securities as well,

in addition to those of the Quaestor

Group. The Compensation Fund started

its operation on January 1, 2016, and

is run by the working organization of

NDIF. The Compensation Fund will soon

have its separate website for the clients

concerned (www.karrendezesialap.hu, in

Hungarian only).

News from Members

Dear EFDI Members,

Do you have any news or informa-

tion you would like to share with

the EFDI Community?

For the next newsletter we are

looking forward to receiving your

input, e.g.

• news about your organiza-

tion

• information about past and

future events and meetings

• articles on topics of interest

to the community, e.g.

payout cases, implemen-

tation issues regarding the

DGSDII, etc.

Please send your contributions to:

secretariat@efdi.eu

until 15th July 2016.

If you have any questions con-

cerning the newsletter or ideas

for improvement, please send

an email to the EFDI Secretariat.

We are looking forward to

hearing from you!

11

RESOLUTION FUND OF HUNGARY(RFH)Bank Resoluti-

on Cases

MKB Bank

Since the be-

ginning of the financial crisis in 2008, the

financial situation of MKB Bank (a top5

commercial bank in Hungary) gradually

worsened mainly because it held a

large portfolio of commercial real estate

loans in foreign currency denomination,

a large part of which became

non-performing as a result of the

crisis. In order to enable MKB Bank

to become viable in the long term,

in December 2014, CBH, acting as

the Hungarian resolution authori-

ty, decided to put MKB Bank into

resolution, following an ownership

change from Bayerische Landes-

bank to the Hungarian State in July

2014. As part of this process, the

Hungarian resolution authority already

sold some of the bank’s bad loans to

private investors.

In November 2015, CBH notified to the

European Commission an aid measure

to deal with the remaining bad loans (a

so-called ”impaired asset measure”) and

a restructuring plan for MKB Bank. The

restructuring plan foresaw to transfer

MKB Bank’s remaining bad loans, to an

asset management vehicle (established

by RFH) at a price above market value

but under real economic value. This ope-

ration is financed by the RFH (run by the

working organization of NDIF), which

obtained a 10-year syndicated loan from

the market in the amount of HUF 45.5

billion and EUR 166.9 million.

On December 16, 2015, the European

Commission approved the restructuring

plan of MKB Bank, and the separation of

bad assets, together with the financing

thereof, was completed on December

23, 2015.

MKB Bank’s healthy activities, including

deposit taking, remained in the core

bank, which will continue its operations

as a viable going concern bank. Accor-

ding to the restructuring plan the core

bank will continue to reduce its cost

structure and fundamentally change its

corporate strategy to restore its long-

term viability. In particular, MKB Bank

will focus again on its core activities to

lend to the real economy in Hungary

instead of engaging in non-core and

risky activities like granting commercial

real estate loans or foreign currency

loans. MKB Bank will also enhan-

ce its corporate governance by

improving its risk management to

prevent the bank from making the

same mistakes again.

Resolution Fund of Hungary (ope-

rationally run by the workforce of

the DGS) carried out two financial

actions contributing to a successful

resolution of the MKB Bank. Using

its power according to the law on resolu-

tion it established Asset Management

company (that is governed by the CBH)

which controls the ownership on the

bank as well as RFH organized syndicate

10 years of loans from the market (billion

45,5 HUF as well as million 166,9 EUR).

Field report

CYPRUS DEPOSIT GUARANTEE SCHEME - ACTIVATION OF THE PROCEDURE FOR PAYMENT OF COMPENSA-TION TO DEPOSITORS

On 9 April 2016 the Management

Committee of Deposit Guarantee and

Resolution of Credit and other

Institutions Scheme announced the

activation of the procedure for the pay-

ment of compensation from the Deposit

Guarantee Fund for Banks for deposits

held in FBME Bank Ltd – Cyprus Branch.

The DGS has been activated because the

Central Bank of Cyprus has established

and has informed the Management

Committee of the DGS that FBME Bank

Ltd – Cyprus Branch appears for the

time being unable to repay deposits for

reasons directly related to its financial

condition and deems that FBME Bank

Ltd – Cyprus Branch will not be able to

do in future.

The related information regarding the

payout case as well as detailed instruc-

tions and forms for depositors can be

found at the following link:

http://www.centralbank.gov.cy/nqcon-

tent.cfm?a_id=15072&lang=en.

12

Field report ROMANIAN INVESTOR COMPENSATION SCHEME 2016

1. Summary update

on compensation

cases in Romania.

Recently, Romania has

faced two situations in which brokers

have failed to return financial instru-

ments and monies to investors, resulting

in two compensation cases. These are

the first compensation experience for

the Investor Compensation Scheme in

Romania.

a. Harinvest S.A. (Ramnicu Valcea,

Romania)

Key facts:

Compensation procedure start date –

September 2014; The judicial insolvency

procedure started in March 2014, but

the Fund received the official ruling only

in September 2014, from the Romanian

Financial Authority.

Nr. of investors claiming compensation:

110

Total amount of claims: 3.71 million euro

Total compensation: 972 thousand euro

Complete compensation procedure

date – February 2016; The majority of

compensation claims was sustain in

December 2015 – 88 from total. The

compensation for 16 claims was post-

poning for February 2016. The reason

for this postponement: these claimants

were part of the court procedures in

progress in December 2015.

At the present time payments to in-

vestors were made and the compensati-

on case closed. ICS Romania will replace

the compensated investors in statement

of affairs.

b. Eurosavam S.A. (Ploiesti, Romania)

Key facts:

Compensation procedure start date –

October 2014; The judicial insolvency

procedure started in August 2013, but

the Fund received the official ruling only

in September 2014, from the liquidator.

Nr. of investors claiming compensation:

4

Total amount of claims: 0.4 million euro

Total compensation: 16.800 euro

At the present time payments to

investors were made and the compensa-

tion case closed. ICS Romania replaced

the compensated investors in statement

of affairs.

2. In addition to the difficulties

mentioned in the previous

Newsletter, ICS Romania adds the

following point of view:

• The legislation does not explicitly

stipulate what are the documents

and actions to be prepared /done

by a liquidator for a brokerage firm.

• Given that, the liquidator has

investor’s documents (eg. invest-

ment services contract, sheet with

investor data, reports of internal

control on these sheet, the brokera-

ge firm’s obligation to qualify an

investor as exempt from compen-

sation, etc.), ICS Romania thinks

that the liquidator is required to

qualify an investor as exempt from

compensation;

• ICS Romania is thinking fit the

insolvency law shall include the

specialized liquidators in capital

market and this market issues;

• ICS Romania meets with another

impediment in compensation cases

– the liquidators were reserved in

communication with ICS about the

capital market issues ;

• A very important issue rise during

one of the compensation case: se-

rious gaps in electronic and physical

archive of the brokerage firm.

RESOLUTION OF CREDIT INSTI-TUTION “COOPERATIVE BANK OF PELOPONNESE COOP. LTD”

On December 18th, 2015, the license of

credit institution “Cooperative Bank of

Peloponnese Coop. LTD” was revoked,

by the European Central Bank Decision

ECB/SSM/2015 – Cooperative Bank of

Peloponnese Coop Ltd/1 of December

18th, 2015, according to the provisions

of article 14 of the Council Regulation

(EU) No 1024/2013 of 15 October 2013.

The credit institution “Cooperative Bank

of Peloponnese Coop. LTD” was placed

under special liquidation.

In this context, the Resolution Measures

Committee (RMC) of the Bank of Greece,

determined the provisional valuation

of the difference in value between

transferred liabilities and transferred

assets from credit institution “Coope-

rative Bank of Peloponnese Coop. LTD”,

which is placed under special liquidati-

on, to “National Bank of Greece S.A.”, at

99,583,000 euro.

The HDIGF Resolution Scheme paid

to “National Bank of Greece S.A.” an

amount equal to 61,388,667 euro,

equivalent to two thirds of the provi-

sional valuation of the difference in

value between transferred liabilities

and transferred assets, according to the

relevant legislation.

The final contributions of the Deposit

Cover Scheme and the Resolution

Scheme will be determined upon the

definitive valuation determination and

the remaining amount will be paid to

the acquiring credit institution.

13

Field report MAPLE BANK GMBH – FIRST COMPENSATION CASE UNDER THE REGIME OF THE GERMAN DEPOSIT INSU-RANCE ACT IN GERMANY

In February 2016, scarcely 7 months after

the implementation of the European

Deposit Guarantee Directive (2014/49/

EU – “DGSD”) at national level and

more than 5 years after the last

case of a bank failure in Germany,

the deposit insurance schemes

of private commercial banks in

Germany faced the compensation

case Maple Bank Bank GmbH

(“Maple Bank”). Maple Bank was

the first compensation case under

the new regime of the German

Deposit Insurance Act (Einlagensi-

cherungsgesetz – “EinSiG”).

Deposit Protection for Private Com-

mercial Banks in Germany

Deposit insurance in Germany essen-

tially consists of three different types

of deposit guarantee schemes, which

largely reflect the structure of the Ger-

man banking system. Relevant for the

“compensation case Maple Bank” are the

deposit insurance schemes of the private

commercial banks.

Private commercial banks have their own

statutory deposit insurance scheme,

which is officially recognised as a deposit

guarantee scheme under Article 4 of the

DGSD. The Entschädigungseinrichtung

deutscher Banken GmbH (Deposit

Compensation Scheme of German Banks

– the “EdB”) protect customer deposits

up to the legally prescribed level.

Alongside the EdB, there exists a volun-

tary deposit protection scheme, the De-

posit Protection Fund of the Association

of German Banks (Einlagensicherungs-

fonds des Bundesverbands deutscher

Banken e.V. - the “ESF”). It is not recogni-

sed as deposit guarantee scheme within

the meaning of Article 4 of the DGSD.

Under the terms of the statutes of the

ESF (“ESF-Statute”), ESF secures deposits

at the private commercial banks up to

a ceiling of 20% of the relevant liable

capital of the respective bank. The

protection extends to all deposits held

by “non-banking institutions”, i.e. depo-

sits held by private individuals, business

enterprises and public bodies. There is

no legal entitlement to compensation by

the ESF.

Determination of Compensation

Event

Maple Bank was a Canadian owned Ger-

man bank with branches in Den Haag,

Netherlands, and Toronto, Canada.

German Authorities commenced an

investigation of Maple Bank for alleged

tax evasion based on cum / ex trades in

Summer 2015. Maple Bank tried to reach

a settlement with German Authorities

with respect to its tax liabilities that the

authorities eventually turned down. The-

reupon the Federal Financial Supervisory

Authority (“Bafin”) imposed a Morato-

rium on 6 February 2016 on the basis

of over-indebtedness on Maple Bank’s

balance Sheet taking into consideration

German tax liabilities and closed the

bank for business with customers.

Only a few days later, on 9 February 2016

Maple Bank advised BaFin of its impen-

ding in-solvency and gave its consent to

BaFin to initiate liquidation proceedings

in respect of Maple Bank in Germany.

BaFin subsequently commenced

insolvency proceedings on 10

February 2016.

On 11 February 2016, shortly after

BaFin iniated liquidation procee-

dings in respect of Maple Bank in

Germany an insolvency administ-

rator was appointed in Germany to

administer the wind-up of Maple

Bank under supervision of the

German Insolvency Court. Bafin

thereupon determined the occurrence

of a compensation event after the

EinSiG, deter-mining that Maple Bank is

unable for the time being, for reasons

that are directly related to its financial

circumstances, to repay deposits that are

due and that Maple Bank has no current

prospect of being able to do so.

Compensation Case

As already successfully practised in the

past, EdB and ESF agreed on a one-stop

depositor compensation via ESF.

Throughout the entire compensation

case EdB and ESF cooperated closely

with Einlagensicherungs- und Treuhand-

gesellschaft mbH („EIS“), a subsidary

of the Auditing Association of German

Banks (Prüfungsverband - „PV“). In bank

failures, EIS has an extensive expertise

in examining depositors’ claims for

compensation and the following payout

procedure.

(see next page)

14

Field report EIS immediately set to work after imposi-

tion of the Moratorium. With determina-

tion of the compensation case by BaFin

on 11 February 2016 the actual work for

all parties involved just began.

As of 15 February 2016, EdB and ESF

both notified the depositors about the

occurrence of the compensation case.

Furthermore, EdBs’ notice contained in-

formation on the amount of the claim of

compensation by EdB and a leaflet with

specific information on the treat-ment of

temporary high balances. As reimburse-

ment by EdB and ESF usually will be

made by bank transfer, depositors had to

return a supplementary sheet to the EIS,

containing i.a. alternative bank details.

In accordance with the German Deposit

Insurance Act the EdB, via the EIS, must

meet depositors’ claims for compensa-

tion within 20 working days of the date

on which the BaFin determines that the

payout event has occurred. ESF agreed

to payout within 20 working days even

without any legal obligation to do so.

Ultimately, this meant that the payout

hat to be completed by 10 March 2016.

The payout process started on 3 March

2016. Thanks to the good and close

cooperation of EdB, ESF and EIS the

deadline could be met easily.

EdB and the Deposit Insurance Fund

compensated in total 168 depositors of

Maple Bank with a total compensation

of 2.6 Billion EUR. Compensation claims

which exceeded the legally guaranteed

amount of 100.000 EUR, were com-

pensated by the ESF up to a protection

ceiling of 59.873 Mio. EUR per costumer.

The overwhelming majority of custo-

mers could be categorized as institu-

tional depositors and fell within the

meaning of the exclusion constituted by

Article 5 of the DGSD. Only 78 depositors

could be categorized eligible depositors

after the German Deposit Insurance Act/

the DGSD. Besides, certain peculiarities,

i.a. temporary high balances and real

cross border issues, did not apply. Maple

Bank can therefore be considered as a

relatively easy case, at least for the EdB.

The ESF on the other hand had to bear

more than 99% of the total compensa-

tion.

THE ROLE OF EIS IN THE MAPLE COMPENSATION PROCEDUREWith determination of the compensa-

tion case, EIS began with an extensive

review of the so-called Presenter File,

a data base that contains i.a. the SCV-

Files with all of the necessary infor-

mation needed for an examination of

depositor claims. With the previous EF-

DI-Newsletter [Issue No. 3, 3 December

2015, p. 10 ff.]. essential technical de-

tails of the aforementioned presenter

file were described vividly and soundly.

EIS identified Maple Banks’ depositors

using the data set of the Presenter File.

Meanwhile, EIS reviewed special cases

(e.g. temporary balances), overviews

of those depositors not eligible either

under the Deposit Insurance Act or the

ESF-Statute have been created auto-

matically.

Within no more than 3 days after the

determination of the compensation

case the results of the review were

entered into the Presenter File and the

main application system of the bank. In

addition, the main application system

of the bank required some adjustments

in respect for the correct calculation of

the compensation amount (e.g. termi-

nation of the credits interest) and the

correct tax treatment of interest. These

specifications were also generated au-

tomatically by own software solutions.

The bank account information provi-

ded by the depositors on the supple-

mentary information sheet were au-

tomatically integrated into the data

system. Based on the information, the

payment transactions files were pre-

pared. Simultaneously, the correspon-

ding accounting file was produced,

reflecting the compensation process

within the main application system of

the bank.

After completion of the compensation

cases, the depositors were informed

regarding the exact composition of the

compensation amount, including the

account and interest balance as well as

the tax treatment of interest.

The presenter file has proven to be a

success in the first compensation case

under the new regime of the Deposit

Insurance Act and in respect of the

numerous and diverse duties required

by the Deposit Insurance Act and the

ESF-Statute.

15

3RD EFDI BALKAN REGION MEETING 10-12 MARCH 2016, ZLATIBOR (SERBIA) 3rd EFDI

Balkan Region

Meeting held

in Zlatibor

(Serbia) from 10 to 12 March 2016 was

attended by 35 participants represen-

ting 6 deposit insurers from the region:

Albanian Deposit Insurance Agency,

Deposit Insurance Agency of Bosnia

and Herzegovina, State Agency for

Deposit Insurance and Bank Resolution

(Republic of Croatia), Deposit Insu-

rance Fund – Republic of Macedonia,

Deposit Protection Fund – Monten-

egro, Deposit Insurance Agency of

Serbia.

Three successful meetings in less then

a year are a proof that deposit insurers

from the Balkan region are committed

to deepening their multilateral coope-

ration. 3rd EFDI Balkan Region Meeting

consisted of two parts: a round table and

panel discussions.

The round table was attended by

the senior management of the

participating institutions, inclu-

ding the directors. Discussion was

focused on the place and role of

deposit insurers from the Balkan

countries in international forums,

and the participants agreed to

continue working together on

improving their respective sche-

mes and regional cooperation.

After the round table meeting,

the participants sign a multila-

teral Memorandum of Understanding

to define the scope and areas of their

joint work. According to the Memo-

randum, the signatories will attempt to

accomplish the following objectives:

exchange professional experiences

and expertise in the areas of deposit

insurance, investor protection and/or

bank resolution; define and pursue their

joint interests at the international forums

by creating joint platforms; enhance

the knowledge base and expertise of

their staff and strengthen the financial

stability locally and regionally.

During the meeting, two panel discussi-

ons took place:

1. Risk monitoring and determining

deposit insurance premium rate,

2. Funding and DIF management.

Each institution presented its point of

view and shared its own experience

concerning one or both topics, while

moderators encouraged the discussion

on important issues. The first panel

focused on the analysis of the DIF

exposure to the risk of member banks in

distress and on the preparation for

the introduction of the risk-based

premiums as per the relevant EU

Directive. The topic of the second

panel referred to the regular and

extraordinary sources of financing

of the deposit insurance fund and

setting the priorities when using

the additional sources, as well as

the risk analysis prior to the intro-

duction of differential premiums.

3rd EFDI Balkan Region Meeting

held in Zlatibor was considered to be

successful by all participants, who also

expressed their determination to further

develop the established cooperation.

Roundtable discussion

Signing of Multilateral MoU

Events and Meetings

16

Events and Meetings TURNING DISADVANTAGE INTO ADVANTAGE - COMMUNICATORS’ MEETING IN ISTANBULNotes from the PR Committee Chairman

Even in these uncertain times many

professionals decided to convene in

Istanbul accepting EFDI’s invitation for

PR Committee

meeting on

April 6. The

event organizer,

the Turkish

Savings Deposit

Insurance Fund

(SDIF), hosted

representatives

from Austria,

Bosnia-Herzegovina, Bulgaria, Czech

Republic, Germany, Hungary, Romania,

UK, Serbia and Switzerland.

The themes of the one-day meeting

were a great mix of fresh issues and in-

itiatives from all over the countries such

as the first-ever payout experiences, the

recent rebranding of an organization, a

good example of a rare event, a decrea-

sing insurance limit, as well as a new

comprehensive comparison of how to

handle media relations during a payout.

Baptism of fire

The main presentation was by the

Deposit Insurance Agency of Bosnia

and Herzegovina (represented by Josip

Nevjestic, Director and Sanja Stankovic,

International Relations Assistant). They

took time out of their buy schedules

in a sensitive period to share practical

experiences of their first payout. The re-

latively small market player Boban banka

(owning 1.5% market share) with more

than 21,000 depositors to compensate.

The overall payout of the case came to

44 million EUR liabilities in total on DIA.

An intensive campaign carried out by

the DIA in the preparatory phase set

up all the necessary technical details.

These included contracting agent bank

(UniCredit), setting up four free phone

lines for incoming calls from depositors

and enquiries from others, physical

client service at DIA’s premises as well

as calling up press conference to inform

the public about the details, including

the maximum limit of the compensa-

tion (25,600 EUR). Handling the case

generated honor from the presented

professionals.

The increasing awareness of the DIA also

raised the demands facing the organi-

zation so our Bosnian colleagues had

to return home after their presentation.

Traveling to the meeting during such

time at home showed a great example

of EFDI membership for the whole

deposit insurer community. We are

grateful to them for their contribution to

the meeting.

Turning disadvantage into advantage

It is very rare when a DGS needs to work

out a campaign for boosting awareness

and also explaining a decreased com-

pensation limit but this is exactly what

happened in the UK with the Financial

Services Compensation Scheme (FSCS).

Due to legislation of the DGSD, a review

of the limit (100,000 EUR) had become

necessary (from 85,000 to 75,000 GBP). It

was the first review in five years.

Mark Oakes (Head of Communications)

talked about the complexity and reputa-

tional challenges of the task detailing

out even the political sensitivity of

decreasing the limit caused by EU law

in the context of a UK referendum. The

strategy took account of the potential

position of some tabloid media to

European issues. As their attitude was

precisely forecasted by the FSCS team, it

provided time for preparation handling

them. FSCS target was reinforcing the

organization as trustworthy through fac-

tual communication to reassure people.

Finally, a close cooperation of com-

petent authorities, a well-tailored and

balanced campaign carried out by the

FSCS team gave even significant awaren-

ess boost both for the FSCS and the new

limit. Consumer awareness of FSCS is at

75%, up 10 points and 40% of all adults

know the new limit, more than doubled

peak of £85,000.

Rebranding a DGS

A total rebranding of an organization

is always a complex issue, raising basic

strategic questions and also showing

future implications. When a DGS loses

the opportunity being called DGS that is

a more tricky one. This is what happened

with the Czech team. From 1st January

2016, the Deposit Insurance Fund of the

Czech Republic has been transformed

into the Financial Market Guarantee

System. The FMGS took over the role

and all responsibilities of the former DGS

and it also administers the newly formed

Crisis Resolution Fund.

Renata Kadlecova (Chairperson of the

Management Board and Managing

Director) introduced how their team was

asked by the competent authority about

(see next page)

PR Committee Chairman

Istvan Toth

17

Events and Meetings choosing the right name and also detail

out the rebranding campaign about

the new graphical design and informa-

tion platforms (website and Facebook

account) of the new organization etc..

The presentation showed challenges

they faced as well as the solutions found

and experiences gained.

Building bridges towards media

Compensation periods and limits are

evergreen topics of conversation and

comparison among DGSs. The way to

inform the public, to plan media activity

and handle media enquiries during

payout events are much less favored

topics.

Oana Ioncel (Communications and PR

Expert of the FGDB of Romania) made a

comprehensive comparison by issuing

a short survey among EFDI members.

Evaluating the 15 received answers

many consequences have been made

and also caused useful debates among

the participants during her presentation.

10 out of the 15 DGS experienced

payout events the last 5 years: Russia:

196, Ukraine: 62, UK: 41, Hungary: 12,

Czech Republic: 5, Bulgaria, Germany,

Italy, Serbia, Switzerland: 1-1.

Surprisingly (or not) most of the DGS

that were involved in payouts reported

friendly or supportive national media

attitude towards the organization, while

none of them experienced critic or

hostile media attitude.

Challenges of the cross border com-

munication

After the plenary session, a short report

followed introducing the current stage

of the H2C Communication Subcommit-

tee’s results. The briefing covered the

established principles of cross border

communication such as “No depositor

worse off“, “same day – same hour –

same message” principles, as well as the

elements of the De minimis (minimum

tools), and Á la carte tools.

The presentations were followed by a

roundtable discussion about the imple-

mentation of the DSGD2 communicati-

on requirements, in particular regarding

the depositors’ letter distributed by

banks. It showed that there is a lot of

room for improvement in this respect, as

in almost every country, the letters led

to an increased number of enquiries by

depositors who were afraid of imminent

bank failures or had problems under-

standing the contents of the letters.

(Only in the UK the depositors’ letter

caused 400 incoming calls per week.)

We agreed after analyzing the afterma-

ths of the letter during an ad-hoc work

shop to return on this topic on the next

meeting.

In the name of all PR Committee mem-

bers, the Chair wishes to express a great

thank you to the host SDIF for the warm

hospitality.

Some personal thoughts after Istanbul:

If we take seriously our job to transfer

knowledge and expertise, no matter

we need to raise our meeting oppor-

tunities as there are currently too many

things and hot topics going on. Many

of them come from EU or local legisla-

tions changes, a lot are hot local topics

providing fresh learning opportunities

from different countries. And we are not

mentioning those challenges we still

need to take into consideration such as

how to incorporate developing techno-

logies into our operation.

Hope our next meeting will help at least

on this latter a bit. It will be dedicated

on managing and handling social media.

The next meeting is scheduled to be

on 13 (Monday) June 2016, in London,

on a later circulated premise.

IMPRINTtEuropean Forum of Deposit Insurers

Association international sans but lucratif (AISBL)

Chairman DIrk Cupei

Vice Chairman Patrick Loeb

Contrôle des Contributions

EFDI account number: 0892.945.871

Registered Seat:

56, Avenue des Arts

1000 Bruxelles

EFDI Secretariat

German Banking Association

Burgstraße 28, 10178 Berlin, Germany

Email secretariat@efdi.eu

Tel 0049 30 1663 2506

EFDI Online

Twitter: @EFDI_Forum

Website: www.efdi.eu

Editorial responsibility:

Dirk Cupei