CONTRACT
ETD/2008/IM/H1/53
IMPLEMENTED BY
FOR
DBB LAW
COMMISSION EUROPEENNE
Pre-insolvency/early intervention, Reorganization measures and
winding up proceedings of banking groups
National Report
GERMANY
By
Dr. Andreas LACHMANN
I - Background information ........................................................................... 1
II - National regulation ................................................................................ 3
1)
Differences between pre-insolvency/early intervention measures and
reorganization/winding-up proceedings..................................................................... 4
2)
Pre-insolvency and early intervention system ................................................. 5
3)
Formal reorganization measures and winding up rules ................................. 12
4)
Recent cases .................................................................................................. 22
For the purpose of this questions:
- "reorganization measures" shall mean measures which are intended to
preserve
or restore the financial situation of a credit institution and which could
affect third parties' pre-existing rights, including measures involving the
possibility of a suspension of payments, suspension of enforcement
measures
or reduction of claims;
- "winding-up proceedings" shall mean collective proceedings opened and
monitored by the administrative or judicial authorities of a Member State
with the aim of realizing assets under the supervision of those authorities,
including where the proceedings are terminated by a composition or other,
similar measure;
-“pre-insolvency/early intervention” shall mean any intervention except and
before reorganization measures and winding-up proceedings
I - Background information
In November 2005, the European Banking Committee identified five areas
(liquidity risk management, crisis management, lending of last resort, deposit
guarantee schemes and reorganization measures and winding-up
proceedings) as part of the supervisory arrangements review to be performed
according to Article 156 of Directive 2006/48/EC. Consequently, the
Commission initiated the review process of the Directive on the
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reorganization and winding up of credit institutions (2001/24/EC) in August
2006.
Under Directive 2001/24/EC, where a credit institution with branches in other
Member States is wound up or reorganised, the winding up or reorganization
measures are initiated and carried out under a single procedure by the
authorities of the Member State where the credit institution has been
authorised (known as the home Member State). This procedure is governed
by the law of the home Member State. This approach is consistent with the
principle of home Member State supervision pursuant to the EU Banking
Directives.
The Directive does not aim at harmonising national legislation, but at
ensuring mutual recognition of Member States' reorganization measures and
winding up proceedings as well as the necessary cooperation between
authorities.
Due to the mere coordinating nature of the Directive, Member States have
different reorganization measures and winding up proceedings. Consequently,
insolvency proceedings for credit institutions differ. Some Member States use
the same general company and insolvency law for the reorganization
measures and winding up of credit institutions as for other businesses, while
others have special reorganization measures for credit institutions.
The Directive covers only the insolvency of branches of credit institutions in
other Member States, but does not cover subsidiaries of banking groups in
other Member States.
Directive 2001/24/EC is limited to procedural aspects concerning each legal
entity within a cross border banking group. This limited scope does not allow
to take into account synergies within such a group, which may benefit all
creditors in case of reorganization measures. This lack of group-wide
approach to winding up and reorganization measures could lead to the failure
of subsidiaries or even the group, which could otherwise have been
reorganised and remained solvent in whole or part.
The October 2007 ECOFIN strategic roadmap for strengthening
arrangements for financial stability requests the Commission
EU
For this purpose, the Commission carried out a public consultation (see also
point 6 of the technical specifications). This consultation seeks clarification
on:

whether Directive 2001/24/EC on the reorganization and winding
up of credit institutions leaves gaps and ambiguities which need to
be removed, and

issues related to the treatment of cross-border banking groups (i.e.
parent credit institutions with subsidiaries in other Member States)
in a crisis situation or under reorganization measures.
The purpose of the public consultation was to take stock of legal frameworks
in the different Member States relating to the reorganization and winding up
of banking groups. The consultation also aimed at identifying problems
preventing a smooth crisis management and a smooth resolution process.
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The focus of Commission's work is on possible reorganization of banking
groups in contrast to ring fencing legal entities (and apply national resolution
tools).
II - National regulation
Please provide a presentation of your national regulation (law, cases,…) and
attach it as Annex A the relevant legal texts and cases summarized in English.
The main focus of the work is how to find solutions in a cross border case of a
banking group for both pre-insolvency/early intervention systems and formal
insolvency (reorganization and winding up measures). Please formulate your
answers in light of it.
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Differences between pre-insolvency/early intervention measures and
reorganization/winding-up proceedings
1) Differences between pre-insolvency/early intervention
measures and reorganization/winding-up proceedings
1.1 Please provide precise information about the key moments during or
preceding a banking crisis:
Please note firstly that reorganization measures in terms of the Directive
2001/24/EC and in terms of the German Law are not only reorganization
measures in an insolvency proceeding as you assume in your
introduction on the page before. Reorganisation measure in terms of the
Directive and German law can also take place before an insolvency
proceeding.
Considering this a differentiation between pre-insolvency/early intervention
measures and reorganization measures seems to be very difficult. The most parts
of sec. 46 and 46a Banking Act belong to the reorganization measures regulated
in the Directive but sec. 46 and 46a Banking Act also includes regulations which
not belong to this. Measures regulated in German Law which are not
comprehended by the Directive 2001/24/EC are amongst others the measures in
case of inadequate own funds or inadequate liquidity according to sec. 45
Banking Act.

Moment/event at which competent authorities trigger the requirement on a
credit institution to take the necessary steps to redress the situation in order
to meet minimum requirements in the Directive and to implement the
measures referred to in Article 136(1) CRD.
If the own funds fail to satisfy the requirements of sec. 10 (1), or the investment
of its funds fails to satisfy the requirements of sec. 11 s. 1, the Federal Financial
Supervisory Authority may act (sec. 45 (1) Banking Act).

Moment at which Member States trigger early intervention measures
If the discharge of an institution's obligations to its creditors, and especially the
safety of the assets entrusted to it, is endangered or if there are grounds for
suspecting that effective supervision of the institution is not possible, the Federal
Financial Supervisory Authority may take temporary measures to avert the
danger (sec. 46 (1) s. 1 Banking Act).
If the conditions specified in sec. 46 (1) s. 1 obtain, the Federal Financial
Supervisory Authority may, to avert insolvency proceedings, order temporarily
measures (sec. 46a (1) s. 1 Banking Act).

Moment at which insolvency is declared.
The Insolvency Code contains three reasons for an insolvency proceeding, the
illiquidity (sec. 17), the imminent illiquidity (sec. 18) and the overindebtedness
(sec. 19).
The debtor is illiquid if he is unable to meet his mature obligations to pay.;
illiquidity shall be presumed as a rule if the debtor has stopped payments (sec.
17 (2) Insolvency Code).
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He is imminent illiquidity if he is likely to be unable to meet his existing
obligations to pay on the date of their maturity (sec. 18 (2) Insolvency Code).
Overindebtedness shall exist if the assets owned by the debtor no longer cover
his existing obligations to pay. In the assessment of the debtor's assets,
however, the continuation of the enterprise shall be taken as a basis if according
to the circumstances such continuation is deemed highly likely (sec. 19 (2)
Insolvency Code).
In general insolvency law the creditors are authorised to file for insolvency of
the debtor if he is illiquid or overindebted (sec. 14). The managing directors are
obligated (sec. 15a) in case of an illiquidity or an overindebtedness and additional
authorised (sec. 15) in case of an imminent illiquidity.
In banking law only the Federal Financial Supervisory Authority is authorised to
file for insolvency in name of the credit institution (sec. 46b (1) s. 4 Banking Act).
The credit institution and the creditors are not authorised to file for insolvency.
Files of creditors or directors of the credit institution are undue. Instead the
directors of the credit institution are obliged to notice an illiquidity, an imminent
illiquidity or an overindebtedness to the Federal Financial Supervisory Authority.
The Federal Financial Supervisory Authority is authorised but not obliged to file
for insolvency. The Federal Financial Supervisory Authority has to decide
according to one's best judgement if it file or not. In case of an imminent
illiquidity the Federal Financial Supervisory Authority is only allowed to file for
insolvency if the credit institution confirms and measures according to sec. 46 or
sec. 46a Banking Act are not promising.

Moment at which the Deposit Guarantee Scheme (DGS) is triggered.
The Deposit Guarantee Scheme take action if a credit institution is not able to
repay deposits or to fulfil security liabilities (sec. 5 (1) s. 1 Deposit Guarantee
and Investor Compensation Act) or measures according to sec. 46a (1) s. 1
Banking Act are persisting longer than six weeks (sec. 5 (1) s. 2 Deposit
Guarantee and Investor Compensation Act).
1.2. Are the following criteria used in order to determine the moments you have
described:

The credit institution possesses adequate resources for it to be able to
continue activities.

The credit institution maintains adequate suitability for it to be able to
continue activities

The credit institution does not comply anymore with the solvency ratio

The credit institution is facing liquidity difficulties
2) Pre-insolvency and early intervention system
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Pre-insolvency and early intervention system
2.1 Pre-insolvency/early intervention systems tailored for banks
Are there, in your national legislation, special pre-insolvency/early intervention
systems that are tailored for banks?
Yes, they are regulated by sec. 45, 46 and 46a Banking Act.
2.2 Pre-insolvency/early intervention systems that can be applied to
banks
If it is not the case, is there in your legislation, any pre-insolvency/early
intervention system that can be applied to banks
2.3 Conditions and features
Please explain briefly the systems currently available in your Member states.
sec. 45
Measures in cases of inadequate own funds
or inadequate liquidity
In case of inadequate own funds or inadequate liquidity the Federal Financial
Supervisory Authority (BaFin) is allowed to request the credit institution to
restore the required capital resources and liquidity within a defined period. If the
credit institution then will not restore the required own funds and liquidity within
the period the Federal Financial Supervisory Authority is allowed to
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prohibit transfers from reserves and profit distributions,
prohibit lending in terms of sec. 19 cl. 1 Banking Act and
order measures for reduction of risks.
sec. 46
Measures in cases of danger
If the discharge of an institution's obligations to its creditors, and especially the
safety of the assets entrusted to it, is endangered or if there are grounds for
suspecting that effective supervision of the institution is not possible, the Federal
Financial Supervisory Authority may take temporary measures to avert the
danger. In particular, it may
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issue instructions on the management of the institution's business,
prohibit the taking of deposits or funds or securities of customers and the
granting of loans (section 19 (1)),
prohibit proprietors and managers from carrying out their activities, or limit
such activities, and
appoint supervisors.
sec. 46a
Measures in cases of danger of insolvency; appointment of persons
authorised to represent the institution
If the conditions specified in sec. 46 (1) s. 1 obtain, the Federal Financial
Supervisory Authority may, to avert insolvency proceedings, temporarily
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issue a ban on sales and payments by the institution,
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Pre-insolvency and early intervention system
order the institution to be closed for business with customers, and
prohibit the acceptance of payments not intended for the discharge of debts
to the institution, unless the appropriate deposit guarantee scheme or
investor compensation scheme undertakes to satisfy in full all those entitled
to satisfaction.
Can it be commenced on a voluntary basis and/or does it have to be ordered by
the authorities?
The credit institution is free to initiate measures within the general provisions of
the banking law unless the management is restricted by the Federal Financial
Supervisory Authority. The sec. 45, 46 and 46a Banking Act contain only
regulatory law and rights for the Federal Financial Supervisory Authority.
What are the legal and economic conditions that must be met for these regimes
to be prompted and applied?
See above.
Is a judicial decision which states that the legal and economic conditions are met
necessary?
No.
2.4 Powers and responsibilities of the intervening authorities
For the execution of these measures, what are the powers of (i.e appointment of
a negotiator in charge of finding solutions to the difficulties faced; organization of
the negotiations with the main creditors of the bank; shares freeze; capital
increase in derogatory conditions; forced transfer of the subsidiary; transfer of
assets enabling the isolation of the risky activities; stay of actions (full or partial)
of payment actions; rescheduling of the main debts due for payment)
See above. The credit institution is free to initiate measures within the general
provisions of the banking law unless the management is restricted by the Federal
Financial Supervisory Authority. The sec. 45, 46 and 46a Banking Act contain only
regulatory law and rights for the Federal Financial Supervisory Authority.
Beyond this there are no other regulations for reorganisation of companies before
filing for insolvency. Only the insolvency proceeding contains regulations for the
reorganisation of companies.
For the execution of these measures (or the lack of decision to set these
measures), what are the responsibilities of:
the nominated practitioner
the nominated administrator
the national bank
See above.
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2.5 Confidentiality
Which measures are confidential and which measures must be made public?
Basically the Federal Financial Supervisory Authority is obliged to act confidential.
But due to the fact that several imaginable measures could have an effect on the
rights of the customer, the customers will hear about this measures.
In insolvency proceeding the creditors (customers too) have to be informed by
the insolvency administrator (sec. 46f (3) Banking Act). Furthermore according to
sec. 46d (1) Banking Act (realisation of art. 4 of the Directive 2001/24/EC) the
Federal Financial Supervisory Authority will acquaint the authorities of the other
member states if possible before it is adopted or otherwise immediately
hereafter.
If the measures according to sec. 46 and 46a (1) Banking Act could effect the
rights of third parties in a host Member state and where an appeal may be bought
in the home Member State against the decision ordering the measure according
to sec. 46d (2) Banking Act (realisation of art. 6 of the Directive 2001/24/EC)
they have to be published in the Official Journal of the European Communities
and at least in two national newspapers in each host Member State.
2.6 Powers and responsibilities of the intervening authorities
Can the intervening authorities reduce the rights of the stakeholders (creditors,
shareholders, deposit holders)?
Is there in your legislation a judicial control of those measures? Please explain.
How are handled the rights of the following stakeholders in the execution of this
kind of measures?
According to sec. 46a (1) Banking Act the Federal Financial Supervisory Authority
is authorised to issue a ban on sales and payments by the institution or order the
institution to be closed for business with customers. In contrast a restriction of
the rights of individual consumers is not possible.
On principle the decisions of the Federal Financial Supervisory Authority may be
reviewed by a court. The decisions of the Federal Financial Supervisory Authority
are administrative acts (Verwaltungsakt) and could be challenged with the so
called “Anfechtungsklage”.
Additional answer according to the email of DBB of June 29th 2009:
According to sec. 5 (1) Deposit Guarantee and Investor Compensation Act the
DGS is only trigged if the Federal Financial Supervisory Authority (BaFin) states
that a case of compensation is given. This requires that a credit institution is not
able to repay deposits or to fulfil security liabilities or that measures according to
sec. 46a (1) s. 1 no. 1 till 3 Banking Act are persisting longer than six weeks.
You were asking if the intervening authorities can reduce the rights of the
stakeholders (creditors, shareholders, deposit holders). According to sec. 46a (1)
s. 1 Banking Act the Federal Financial Supervisory Authority is authorised to issue
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a ban on sales and payments by the institution (no. 1) or order the institution to
be closed for business with customers (no. 2).
The rights of the shareholders are not directly affected by such measures. Of
cause, there might be an indirect impact. E.g. if the institution is forbidden to
make any payments, also dividends cannot be paid out. However, the rights of
the creditors to enforce their claims can be affected by forbearance to the
institution to make any payments.
Additionally you were asking whether DGS is triggered.
This is not the case. The measures according to sec. 46a (1) s. 1 Banking Act do
not necessarily trigger the DGS.
Possibly your further question is based on the wording of sec. 46a (1) s. 1 no. 3
Banking Act, where the DGS is mentioned. Sec. 46a (1) s. 1 no. 3 Banking Act
reduces the rights of the credit institution, not the rights of stakeholders
(creditors, shareholders, deposit holders). According to sec. 46a (1) s. 1 no. 3
Banking Act the Federal Financial Supervisory Authority is authorised to prohibit
the acceptance of payments which are not intended for the discharge of debts to
the institution, unless the appropriate deposit guarantee scheme or investor
compensation scheme undertakes to satisfy in full all those entitled to
satisfaction. In other words: If the BaFin intervenes according to sec. 46a (1) no.
3 Banking Act, the DGS cannot be triggered.
Can intervention decisions override shareholder’s rights in the scope of these
measures?
Yes, they can. According to sec. 46 (1) Banking Act the Federal Financial
Supervisory Authority is authorised to
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issue instructions on the management of the institution's business,
prohibit proprietors and managers from carrying out their activities, or limit
such activities, and
appoint supervisors.
Furthermore decisions on the distribution of profits shall be invalid insofar as they
contradict any of this orders. In this respect a intervention decision can override
shareholder’s rights.
2.7 Relation with the formal insolvency proceedings
What is the relation of pre-insolvency/early intervention systems with formal
insolvency legislation? How do they interact?
There is no relation. The formal insolvency proceeding presumes a petition. In the
insolvency proceeding the insolvency administrator control the company. The
regulations of Banking Act are regulatory law. In case of an insolvency the
Federal Financial Supervisory Authority will continue her function as authority and
so the Federal Financial Supervisory Authority will continue to take measures
according to sec. 45 and 46 Banking Act.
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The only speciality is, that only the Federal Financial Supervisory Authority is
authorised to file for insolvency, therefore a insolvency proceeding against the
decision of the Federal Financial Supervisory Authority is not possible.
Is there in your legislation any special effect of the pre-insolvency/early
intervention measures on special contracts (set off, netting for example)?
No.
Is there in your legislation any specific financing system for banks under preinsolvency/early intervention?
No, except for the special regulations for overcoming the actual banking crisis. As
you are no doubt aware the German government supports the banks with
guarantee, loans and capital.
Can the deposit guarantee scheme be used to finance the pre-insolvency
measures?
No, this is not the mission of the deposit guarantee scheme. The deposit
guarantee scheme secures the capital of consumers not the credit institution.
2.8 Group aspect and Cross-border situations
In a national context (when both the parent company and the subsidiaries are
located in your Member state), do the pre-insolvency measures apply to the
subsidiaries?
According to sec. 10a Banking Act the adequacy of the own funds of a banking
group has to be calculated overall. So if the own funds of the group are
inadequate, the Federal Financial Supervisory Authority will initiate measures
against the parent company (sec. 45 (2) Banking Act). Measures against
subsidiaries are only possible if the subsidiaries fail itself the required own funds.
All other measures can only be released against the credit institution which
achieves the terms of the regulations (sec. 45, 46 and 46a Banking Act).
Do the systems you have described above apply to cross-border situations (on
which legal basis, i.e territoriality or universal principles)? How would a cross
border case be managed in the following cases:
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When the ailing bank in your Member state is the subsidiary of a
parent company located in another Member state?
The Federal Financial Supervisory Authority is not authorised to release an
administrative act against foreign companies, but the Federal Financial
Supervisory Authority is authorised to release administrative acts against the
home company with effect for the foreign branches of the home company (see
art. 3 (2) of the Directive 2001/24/EG).
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When the ailing bank in your Member state is the parent company of
one or several subsidiary located in another Member state?
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Pre-insolvency and early intervention system
See above.
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When the ailing bank in your Member state is the subsidiary of a
parent company located in a third country?
See above.
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When the ailing bank in your Member state is the parent company of
one or several subsidiary located in a third country?
See above.
Is there in your legislation state a specific pre-insolvency/early intervention
created for cross border situations (please consider both subsidiaries and
branches separately)
There isn’t a specific system for cross-border situations. But according to sec. 46d
(1) Banking Act (this realise art. 4 of the Directive 2001/24/EC) the Federal
Financial Supervisory Authority will acquaint the authorities of the other member
states if possible before it is adopted or otherwise immediately hereafter. And if
the measures according to sec. 46 and 46a (1) Banking Act could effect the rights
of third parties in a host Member state and where an appeal may be bought in the
home Member State against the decision ordering the measure according to sec.
46d (2) Banking Act (art. 6 of the Directive 2001/24/EC) they have to be
published in the Official Journal of the European Communities and at least in two
national newspapers in each host Member State.
How does (or would) your national legislation deal with the cross-border aspects
(are there situations where the Law of another Member state is applied) in the
case of subsidiaries, not branches?
German Law doesn’t know a regulation for a insolvency of a group. The
insolvency law regulates only the insolvency of each company. Pursuant no
legislation for cross border aspects in the case of subsidiaries exists.
How does your court deal with a conflict with another Member states’ Law: when
there is a divergence between both Laws, can an agreement be concluded under
the control of your national judge?
This depends on the subject of the proceedings. In German Law the parties of the
proceeding can (anyway after emergence of the litigation) make a deal which
court should be appropriate.
2.9 Efficiency of those proceedings
Do you think the measures you have described above provide for optimal
response in order to deal with problems in an ailing cross-border bank (please
explain)?
There is no demand for a regulation of cross-border situation. Once again, the
Banking Act only contains regulatory law. A cross-border operating credit
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Formal reorganization measures and winding up rules
institution is free to initiate measures with cross-border effects as long as they
comply with the regulatory frameworks of the involved states.
There is no demand for an intervention of the German authority against foreign
companies and no demand for an intervention of foreign authorities to German
companies.
Are there changes recently adopted or being discussed in your legislation?
Currently a regulation for a “group insolvency” is being discussed.
3) Formal reorganization measures and winding up rules
3.1 General question
Can you briefly explain what types of insolvency systems currently apply in your
Member states (please briefly explain the differences if there are several)?
The following introduction is based on an official text of the ministry of justice of
North Rhine-Westphalia:
Opening proceedings
Insolvency proceedings can only be opened if a request is filed at the court which
is competent for the debtor' s place of business. Further an insolvency reason is
necessary. The Insolvency Statute in general admits two insolvency reasons: the
illiquidity, i.e. the inability to pay the due obligations and the overindebtedness,
which requires that the assets of the debtor do not cover his obligations. The
overindebtedness is only an insolvency reason for legal entities and not for
natural persons.
The request can either be filed by the debtor or a creditor. If it is based on the
insolvency reason of imminent illiquidity only the debtor has the right to file a
request.
During the period until the opening decision the court has to take all necessary
measures to prevent any detrimental changes of the debtor' s assets. Section 21
of the Insolvency Statute offers a catalogue of such measures. In particular the
court can impose a general prohibition of transfers against the debtor. Any
execution against the debtor can be either forbidden or stayed. And above all the
court can appoint a temporary administrator. The rights and duties of such a
temporary administrator differ depending on whether the court has imposed a
general prohibition of transfers against the debtor or not. If it has done so the
temporary administrator has the full right to manage and to transfer the debtor' s
assets (so-called “strong” temporary administrator). This means that he can take
possession of the debtor' s assets, continue the debtor' s business and – within
certain limits – sell the debtor' s goods and collect the claims the debtor has
against others.
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Formal reorganization measures and winding up rules
If the court appoints a temporary administrator without imposing a prohibition of
transfers against the debtor, the court itself can determine the single duties and
rights of the temporary administrator (so-called “weak” temporary
administrator). But they cannot reach as far as in the case of a prohibition of
transfers.
If an insolvency reason exists the insolvency proceedings have to be opened if
the assets of the debtor cover the costs of the proceedings. The „costs of the
proceedings“ include only the court fees, the remuneration and expenses of the
temporary administrator, of the final administrator and of the members of the
creditors´ committee. The other costs of the insolvency administration do not
belong any more to the „costs of the proceedings“. Therefore they do not have to
be covered by the debtor' s assets as a precondition of the opening of the
proceedings.
The opened (regular) insolvency proceedings
If insolvency proceedings are opened the court will appoint an administrator and
determine the date of the first meeting of creditors, the so-called „report
meeting“, in which the creditors have to decide about the further development of
the proceedings. Simultaneously with the opening of the proceedings the debtor
looses the right to manage and transfer his assets. This right passes over to the
administrator.
The right to manage and transfer the assets concerns the bankruptcy estate. At
that time it only consisted of the estate which was owned by the debtor at the
time of the opening of the proceedings. Under the Insolvency Statute the
acquisitions which are made by the debtor during the proceedings are also part of
the bankruptcy estate.
When the proceedings are opened the creditors can file their claims with the
administrator. The law knows three groups of claims/obligations:
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the estate obligations,
the normal insolvency claims and
lower-ranking claims.
„Estate obligations“ are
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the costs of the proceedings,
those obligations created by activities of the administrator or the temporary
administrator to whom the debtor' s right to transfer was vested,
obligations under mutual contracts, if their performance either is claimed by
the administrator or has to take place after the opening of the proceedings
and
obligations due to unjust enrichment of the estate.
The estate claims have to be fully satisfied before anything can be paid on
insolvency claims. If the estate is not sufficient to fully satisfy all of them - which
is usually the case - an equal percentage will be paid on each claim.
Lower-ranking claims are
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the interest accruing on the insolvency claims from the opening of the
proceedings,
costs incurred by creditors due to their participation in the proceedings,
fines and similar claims,
claims to the debtor' s gratuitous perfomance and
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Formal reorganization measures and winding up rules
certain claims of partners of insolvent companies.
The highest organ of the insolvency proceedings is the meeting of creditors.
During their first meeting the creditors can for example replace the court
appointed administrator and elect another one. All other essential decisions
concerning the proceedings are either made by the meeting of creditors or by the
creditors´ committee. The meeting of creditors particularly decides whether the
debtor' s enterprise shall be closed or continued. The administrator has to ask for
the consent of the creditors´ committee or – if no committee is appointed – for
the consent of the meeting of the creditors concerning all transactions which are
of particular importance. This of course includes the decision whether an
enterprise shall be sold or not.
The task of the creditors´ committee is to support and to monitor the
administrator. It can be established by the court before the first meeting of
creditors. Later the meeting of creditors will decide whether the committee shall
be maintained, changed in its composition or established, if no committee was
established by the court.
The claims of the creditors have to be filed with the administrator. He has to
enter them in an insolvency schedule. During the so-called verification meeting
the amount and the rank of the filed claims are verified. If there are no denials of
the administrator or any creditor the claims are deemed to have been
determined. Denials and determinations are entered into the insolvency schedule.
Concerning the determined claims the entry in the table has – concerning amount
and rank - the same effect as a final judgement with respect to the administrator
and the creditors. Has a claim been denied by the administrator or a creditor it is
up to the creditor of the denied claim to initiate proceedings to determine such
claim against the denying party.
After the verification meeting the distribution can start. It follows a distribution
record which is established by the administrator. As soon as the distribution of
the debtor' s assets is carried out, the court decides on the termination of the
insolvency proceedings.
The insolvency plan proceedings
The autonomous mastering of the insolvency by the creditors and the debtor is
not subject to separate proceedings but part of uniform insolvency proceedings.
Within these proceedings it is one of several courses which can be followed on the
search for the best opportunity to satisfy the creditors´ claims. This uniform
system is different from other insolvency laws like for example the U.S.
Bankruptcy Code which demands a decision between the liquidation proceedings
of Chapter 7 and the plan proceedings of Chapter 11. Nevertheless there are also
many similarities between the insolvency plan proceedings of the German
Insolvency Statute and the provisions of Chapter 11.
The law does not define the purpose of the insolvency plan. The parties are
allowed to diverge from the provisions of the Insolvency Statute and to find a
different solution. Therefore the insolvency plan can even provide a liquidation
although it was introduced mainly to preserve, to rehabilitate and to reorganize
the enterprise of the debtor.
An insolvency plan can be set up and submitted to the court only by the debtor or
the administrator. The plan has to consist of a declaratory and a constructive
part. In the declaratory part the rehabilitation concept is described. The
constructive part determines the impacts of the rehabilitation on the single rights
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Formal reorganization measures and winding up rules
and claims of the creditors. One of the most important principles of the
insolvency plan is that the creditors are divided into groups. The creditor groups
can be treated differently by the plan if a justifying reason exists. The plan for
example can form different groups for secured creditors, for normal insolvency
creditors, for those creditors whose claims rank behind the claims of the normal
insolvency creditors and for the employees. The number of groups is not limited.
It is up to the fantasy of the person who is setting up the plan. The only demand
is that there has to be a justifying reason if two creditors are put into two
different groups.
The insolvency plan needs the consent of the creditors. It has to be presented to
them in a meeting during which the plan is discussed. At the end of that meeting
the creditors decide on the adoption of the plan. They vote by groups. The plan is
adopted if in each group the majority of the voting creditors backs the plan and if
the sum of the claims of the creditors backing the plan exceeds half of the sum of
all claims of the voting creditors. There is however a prohibition of obstruction,
which shall prevent that an economically sensible plan fails because of the
opposition of a single or a few creditors: If in one group the majority is not
achieved that group is deemed to have consented if the creditors of that group
are not treated worse by the plan than they would be without the plan. Moreover
the majority of the groups must have backed the plan.
The debtor has to back the plan, too. He is deemed to have consented if he has
not opposed the plan until the voting of the creditors. If he is not treated worse
than he would be without the plan his opposition to the plan is irrelevant.
Finally the plan has to be confirmed by the court. After the decision of the court
has got legally binding, the plan gets effective, the insolvency proceedings are
terminated and the debtor recovers the power to transfer his assets. The
constructive part of the insolvency plan may provide for surveillance of
implementation of the plan by the administrator.
The self administration proceedings
Furthermore there is an other alternative insolvency proceeding. The concept of
self administration (comparable to US Chapter 11 Debtor in Possession) means
that the insolvent company’s management deals with the conduct of the
insolvency proceedings. The company is both advised and supervised by a trustee
who is empowered with certain administrator rights, such as the right to
challenge transactions.
3.2 Definition and scope of reorganization measures
What do “reorganization measures” mean in practice in your Member state? (in
general and for banks especially)?
In case of inadequate own funds or inadequate liquidity the Federal Financial
Supervisory Authority is allowed to request the credit institution to restore the
required capital resources and liquidity within a defined period. If the credit
institution then will not restore the required own funds and liquidity within the
period the Federal Financial Supervisory Authority is allowed to
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prohibit transfers from reserves and profit distributions,
prohibit lending in terms of sec. 19 cl. 1 Banking Act and
order measures for reduction of risks.
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If the discharge of an institution's obligations to its creditors, and especially the
safety of the assets entrusted to it, is endangered or if there are grounds for
suspecting that effective supervision of the institution is not possible, the Federal
Financial Supervisory Authority may take temporary measures to avert the
danger. In particular, it may
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issue instructions on the management of the institution's business,
prohibit the taking of deposits or funds or securities of customers and the
granting of loans (section 19 (1)),
prohibit proprietors and managers from carrying out their activities, or limit
such activities, and
appoint supervisors.
Additional the Federal Financial Supervisory Authority may, to avert insolvency
proceedings, temporarily
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issue a ban on sales and payments by the institution,
order the institution to be closed for business with customers, and
prohibit the acceptance of payments not intended for the discharge of debts
to the institution, unless the appropriate deposit guarantee scheme or
investor compensation scheme undertakes to satisfy in full all those entitled
to satisfaction.
Additional answer according to the email of DBB of June 29th 2009:
We pointed out the difficulty of a differentiation between “reorganisation
measures" and “pre-insolvency/early intervention measures” in the first
text-box of item 1.1 on page 4:
“Please note firstly that reorganization measures in terms of the Directive
2001/24/EC and in terms of the German Law are not only reorganization
measures in an insolvency proceeding as you assume in your introduction on the
page before. Reorganisation measure in terms of the Directive and German law
can also take place before an insolvency proceeding.
Considering this a differentiation between pre-insolvency/early intervention
measures and reorganization measures seems to be very difficult. The most parts
of sec. 46 and 46a Banking Act belong to the reorganization measures regulated
in the Directive but sec. 46 and 46a Banking Act also includes regulations which
not belong to this. Measures regulated in German Law which are not
comprehended by the Directive 2001/24/EC are amongst others the measures in
case of inadequate own funds or inadequate liquidity according to sec. 45
Banking Act.”
Corresponding to this we laid down the application of the same regulations (sec.
45, 46, and 46a Banking Act) under the heading “pre-insolvency/early
intervention measures” and also under “reorganisation measures".
Now you question why we outlined the same measures as well under “preinsolvency/early intervention measures” and “reorganisation measures".
Furthermore, you are asking if you shall consider that in Germany no
reorganization measures for banks exist.
According to Art. 2 of Directive 2001/24/EC “reorganisation measures" shall
mean measures which are intended to preserve or restore the financial situation
of a credit institution and which could affect third parties' pre-existing rights,
including measures involving the possibility of a suspension of payments,
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suspension of enforcement measures or reduction of claims and "winding-up
proceedings" shall mean collective proceedings opened and monitored by the
administrative or judicial authorities of a Member State with the aim of realising
assets under the supervision of those authorities, including where the
proceedings are terminated by a composition or other, similar measure.
As you defined on page 1 of the National Report Part II “pre-insolvency/early
intervention” shall mean any intervention except and before reorganization
measures and winding-up proceedings. For German law this definition of
“pre-insolvency/early intervention” is not practicable. A time-based delimitation
(“before”) is not possible, because Art. 2 of Directive 2001/24/EC defines
“reorganisation measures" as types of measures and not as an event which
requires special measures. Also a delimitation to “pre-insolvency/early
intervention” by coverage (“except”) is not feasible, because the definition of
Art. 2 of Directive 2001/24/EC of “reorganisation measures" is very
comprehensive.
To make it more clear:
The BaFin is entitled to enforce measures before the starting of an insolvency
proceeding. Theses are reorganisation measures according to 2001/24/EC. Such
measures may also be imposed after the application for insolvency by BaFin on
the assets of a credit institution or after the opening of an insolvency proceeding
on the assets of a credit institution. Thus, the BaFin measures are not linked to
the Insolvency Act.
On the other hand, the German law provides for measures which are laid down in
the Insolvency Act which can be imposed by the insolvency court during the preinsolvency proceeding. However, such measures are not linked to the business of
the debtor. Thus, such restrictions also apply for credit institutions. Furthermore,
there are restrictions under the Insolvency Code after the opening of the
procedure. Also such limitations derise of the generally applicable law.
In Germany there does not exist a special procedure before the application for
insolvency. However, BaFin will normally impose measures at that stage to
prevent the insolvency of a credit institution.
What are the conditions for commencing reorganization measures (for banks
especially)?
See above (item 1.1).
Who can initiate a reorganization measures (in general and for banks especially)?
We described this above. The measures according to sec. 45, 46 and 46a Banking
Act can only be initiated by the Federal Financial Supervisory Authority. Of course
the management of the credit institution can initiate own measures (within the
usually regulations).
Are banks treated specifically in insolvency legislation (are there specific rules for
either reorganization measures or winding up proceeding)?
We described this above. See in particular sec. 46b Banking Act.
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3.3 Relations between reorganization measures and winding up
Are the triggering events defined by laws for both reorganization and winding up
measures or it is up to the courts to decide? Explain
Reorganization measures are regulated in sec. 45, 46 and 46a Banking Act.
Winding up measures are regulated in the Insolvency Code. Both we described
above and both (in principle) are independent.
3.4 Power and authorities of the authorities intervening
Regarding reorganization and winding up, what are the powers of (for the
commencement and the management of this kind of measures):
We described the possible measures. Before an insolvency proceeding is opened
only the Federal Financial Supervisory Authority is authorised to order measures.
Of course the management of the credit institution can initiate reorganisation
measures too. Pursuant the insolvency administrator manage the business in
case of an insolvency proceeding.
For the execution of these measures (or the lack of decision to set these
measures), what are the responsibilities:
See above.
3.5 Group treatment
The purpose of this paragraph is to determine if group of companies are treated
in your Member state at an entity level or in a coordinated way (by the legislation
or case law, in internal or cross border situations, for banks specifically or other
companies).
For the purpose of this paragraph, please consider that a group is constituted by
a parent company and subsidiaries, not branches.
-Is there any legislation or court practise that specifically apply to a group?
As we described each company has his own insolvency proceeding, so each
company will be wound up separately. Reorganisation measures or early
interventions against a group on the whole are not possible. Measures according
to sec. 45 (2) Banking Act could address the superordinated company, but it
couldn’t address to subsidiaries which are healthy.
-Is there any special legislation or court practise that specifically apply to a
banking group?
Yes we described above. The Banking Act contains regulations for banking groups
(see in particular sec. 10a, 10c, 45 (2) Banking Act).
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Formal reorganization measures and winding up rules
What is the definition of the “group” that can be treated in a coordinated or joint
way?
According to sec. 10a (1) Banking Act a group of institutions consists of a
superordinated company domiciled in Germany and at least one subordinated
company.
Is it possible to include solvent subsidiaries in the formal insolvency proceedings?
The insolvency proceeding only can be opened for each insolvent company (equal
if superordinated or subordinated). It doesn’t exist an insolvency proceeding for a
whole group.
Could you explain if the following measures are available in your Member state
(please consider both purely internal situations and if a close notion exists in your
Member state, please explain):
Joint application
See above. The insolvency proceeding only can be opened for each insolvent
company (equal if superordinated or subordinated). It doesn’t exist an insolvency
proceeding for a whole group. Therefore a joint application is not possible.
Joint administrator
It is not possible to appoint a joint administrator, but it is possible to appoint the
same administrator in each insolvency proceeding of the companies of one group
as long as the creditors' meeting of each company does not elect an other
administrator.
Joint or coordinated proceeding
See above.
Cooperation of insolvency administrators
See above.
Joint reorganization plan
See above.
Consolidation or pooling of assets
See above. No consolidation or pooling of assets will be possible in an insolvency
proceeding because every administrator of each company is obliged to handle
trustful with the insolvency estate.
Extension of liability
Liability of whom? A extension of the liability is not possible without the
acceptance of the liable person or company.
Contribution orders
See above.
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Full/partial liability of majority owner/mother
Except for the legal liability of a controlling company a liability is not possible
without the acceptance of the liable person or company.
Other practises that are in favour of group treatment
Nothing to add.
Additional answer according to the email of DBB of June 29th 2009:
On item 3.5 you asked if German banking law knows an extension of liability as
measure in an insolvency proceeding.
Now you ask additional if German banking law knows a liability of the parent
company in case of acting as a de facto managing director.
Indeed German law knows a liability of a de facto managing director in general. A
person or a company which acts as a de facto managing director is liable on the
equal premises as an ordinary managing director. But this liability is neither a
speciality of insolvency proceeding, nor a speciality of banking law.
Furthermore, the parent company is liable if it harms the existence of the
subisidiary in a way which is generally detrimental to its existence.
3.6 Cross border situations
In a national context (when both the parent company and the subsidiaries are
located in your Member state), do the reorganization and winding up proceedings
apply to the subsidiaries?
No, see above.
Do the systems you have described above apply to cross-border situations (on
which legal basis, i.e territoriality or universal principles)? How would a cross
border case be managed in the following cases:
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When the ailing bank in your Member state is the subsidiary of a
parent company located in another Member state?
See above.
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When the ailing bank in your Member state is the parent company of
one or several subsidiary located in another Member state?
See above.
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When the ailing bank in your Member state is the subsidiary of a
parent company located in a third country?
See above.
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Formal reorganization measures and winding up rules
When the ailing bank in your Member state is the parent company of
one or several subsidiary located in a third country?
See above.
Are there in your legislation specific reorganization/winding up proceedings
created for cross border situations (please consider both subsidiaries and
branches separately)
See above.
How does (or would) your national legislation deal with the cross-border aspects
(are there situations where the Law of another Member state is applied) in the
case of subsidiaries, not branches?
See above.
How does your court deal with a conflict with another Member states’ Law: when
there is a divergence between both Laws, can an agreement be concluded under
the control of your national judge?
See above.
Is there any legal basis for cross border cooperation in reorganization measures
or winding up proceedings at group level? Could you explain precisely which
authorities actually cooperate under this legal basis and how?
See above.
Could you explain if the following measures are available in your Member state
(please consider only cross-border situations, and if a close notion exists in your
Member state, please explain):
See above.
3.7 Efficiency of those proceedings
Do you think the measures you have described above provide for optimal
response in order to deal with problems in an ailing cross-border bank regarding:
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The interest of the entity concerned?
Firstly this is a very political and economical question which should answered by
the concerned stakeholders. So we only can try to answer this question
generalised. Remembering the free-market economy it is fundamental that each
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company (equal if a credit institution) have to act autonomous. The sovereign
should not intervene if it is not necessary for the interest of the general public.
In the first instance the management has to decide if and how to reorganise the
credit institution. At this juncture the management has to participate the
shareholder meeting if necessary. Insofar the interests of the entity concerned
and her shareholders rank first. Not until the credit institution violates the
regulations of own funds and liquidity or risks according to sec. 46, 46a Banking
Act occur the Federal Financial Supervisory Authority will act. The measures
regulated in the Banking Act conduce to covering the banking system and the
credit institutions in detail. Finally the measures conduce to creditors and deposit
holders and each covering of a credit institution also covers the jobs of the
employees.
Modifications would improve the status of some involved stakeholders and
concurrent impair the status of other involved stakeholders. The actual system is
balanced out; so we can not say the system should be modified.
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The interests of its creditors?
See above.
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The interests of the deposit holders?
See above.
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The interest of shareholders
See above.
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The interest of the employees
See above.
Do you think these measures can efficiently solve financial difficulties faced by a
bank?
See above.
Are there changes recently adopted or being discussed in your legislation?
No.
4) Recent cases
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4.1 Recent cases - pre-insolvency/early intervention measures
Have you had any recent cases of pre-insolvency/early intervention measures
applied to a credit institution (standalone, parent, subsidiary or branch) in your
country?
-
Please provide examples of institutions which experienced
difficulties or failures over the past 4 years in your country that
required the implementation of pre-insolvency/early intervention
measures?
Kindly excuse, because of the obligation of secrecy as lawyer we are
not allowed to answer question to precise cases.
-
Did these credit institutions have branches in other member
states?
See before.
-
Did these credit institutions have subsidiaries in other member
states?
See before.
-
Briefly explain the case(s), the procedures followed, the results,
the participating authorities, sources of financing
See before.
- Explain how the cross border elements were taken into
consideration (cooperation of authorities, administrators etc)
See before.
-
Explain how and by which organisation decisions were made
about the appropriate measures to implement.
See before.
-
Explain how decisions were made (and by whom) on whether to
implement the pre-insolvency/early intervention measures the
credit institution.
See before.
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Are there things that you would have wanted to do, as part of
pre-insolvency/early intervention that you were not able to do
under the current legal framework? If so, what?
See before.
4.2 Recent cases – Reorganization and winding-up
Have you had any recent cases of winding-up of a credit institution (standalone,
parent, subsidiary or branch) in your country?
-
Which institutions had difficulties or failures over the past 4 years
in your country that required the implementation of
reorganization and winding-up?
Kindly excuse, because of the obligation of secrecy as lawyer we are
not allowed to answer question to precise cases.
-
Did these credit institutions have branches in other member
states?
See before.
-
Did these credit institutions have subsidiaries in other member
states?
See before.
-
Briefly explain the case(s), the procedures followed, the results,
the participating authorities and the sources of financing
See before.
- Explain how the cross border elements were taken into
consideration (cooperation of authorities, administrators etc)
See before.
-
Explain how and by which organisation decisions were made
about the appropriate measures to implement.
See before.
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Explain how decisions were made (and by whom) on whether to
reorganise or wind up the credit institution.
See before.
4.3 Contact
What are the main actors (banks, liquidators, law firms,...) in your country
involved in reorganization measures and/or winding-up proceedings of credit
institutions:
- Please send us contact details of people/firms who already have
applied the provisions of the Winding-up Directive or who might
apply the Directive in the future if a credit institution fails in your
country.
Kindly excuse, because of the obligation of secrecy as lawyer we are
not allowed to answer question to precise cases.
-
Please also send us contacts details of associations of liquidators
(if any) dealing with reorganization measures and/or winding up
proceedings in the financial sector.
See before.
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Annex A - The relevant legal texts and cases in English
Insolvency Code
Sec. 17 - Illiquidity
(1)
Illiquidity shall be the general reason to open insolvency proceedings.
(2)
The debtor shall be deemed illiquid if he is unable to meet his mature
obligations to pay. Illiquidity shall be presumed as a rule if the debtor has
stopped payments.
sec. 18 - Imminent Illiquidity
(1)
If the debtor requests the opening of insolvency proceedings imminent
illiquidity shall also be a reason to open.
(2)
The debtor shall be deemed to be faced with imminent illiquidity if he is
likely to be unable to meet his existing obligations to pay on the date of
their maturity.
(3)
If in the case of a corporation, or of a company without legal personality,
the request is not filed by all members of the board of directors, all general
partners or all liquidators, subs. 1 shall only apply if the person or persons
filing the request are empowered to represent the company or the
partnership.
sec. 19 - Overindebtedness (as amended until autumn 2008 wish is valid
again from 2011)
(1)
Overindebtedness shall be also a reason to open insolvency proceedings for
a corporation.
(2)
Overindebtedness shall exist if the assets owned by the debtor no longer
cover his existing obligations to pay. In the assessment of the debtor's
assets, however, the continuation of the enterprise shall be taken as a basis
if according to the circumstances such continuation is deemed highly likely.
(3)
If none of the general partners of a company without legal personality is an
individual, subs. 1 and 2 shall apply mutatis mutandis. This shall not apply
if the general partners include another company with an individual as
general partner.
Banking Act
sec. 45 - Measures in cases of inadequate own funds or inadequate
liquidity
(1)
If, at any institution, the own funds fail to satisfy the requirements of
section 10 (1), or the investment of its funds fails to satisfy the
requirements of section 11 (1), the Federal Financial Supervisory Authority
may
1. prohibit or limit withdrawals by the proprietors or partners and the
distribution of profits
2. prohibit or limit the granting of loans in terms of section 19 (1)) and
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3. instruct the institution to take measures to decrease the risks as far as
these result from certain kinds of business and products or using of
certain systems.
(2)
Subsection (1) numbers 1 and 3 shall apply as appropriate to superordinate
enterprises in terms of section 10a (1) to (5) and institutions in terms of
section 10a (14) if the consolidated own funds of the enterprises belonging
to the group are not up to the mark according to section 10 (1).
In such cases the Federal Financial Supervisory Authority furthermore may
reduce the large exposure limits according to section 13 (3) sentence 5 and
13a (3) sentence 3 and (4) sentence 5 which apply with the proviso of
section 13b to the group of institutions or the financial holding group.
(3)
If the own funds of a financial conglomerate are not up to the marks of
section 10b (1) the Federal Financial Supervisory Authority may
1. take measures according to subsection (1) against a superordinated
financial conglomerate enterprise in terms of section 10b (3) sentence 6
to 8 or (4) which operates in the bank and share service industry;
2. take the required and adequate measures against a mixed financial
holding enterprise; in particular she may prohibit or limit withdrawals by
the proprietors or partners and the distribution of profits.
(4)
The Federal Financial Supervisory Authority may issue the orders specified
in subsection (1) to (3) only if the institution or the mixed financial holding
enterprise has failed to remedy the deficiency within a period set by the
Authority. Decisions on the distribution of profits shall be invalid insofar as
they contradict an order issued pursuant to subsection (1) to (3).
sec. 46 - Measures in cases of danger
(1)
If the discharge of an institution's obligations to its creditors, and especially
the safety of the assets entrusted to it, is endangered or if there are
grounds for suspecting that effective supervision of the institution is not
possible (section 33 (3) numbers 1 to 3), the Federal Financial Supervisory
Authority may take temporary measures to avert the danger. In particular,
it may
1. issue instructions on the management of the institution's business,
2. prohibit the taking of deposits or funds or securities of customers and
the granting of loans (section 19 (1)),
3. prohibit proprietors and managers from carrying out their activities, or
limit such activities, and
4. appoint supervisors.
Decisions on the distribution of profits shall be invalid insofar as they
contradict any order issued pursuant to sentences 1 and 2. In the case of
institutions organised in a form other than that of a sole proprietorship,
managers who have been prohibited from carrying out their activities shall
be barred from managing and representing the institution for the duration
of the prohibition. Regarding the claims arising from the employment
contract or from other provisions governing the activities of the manager,
the general regulations shall apply. Rights permitting a manager to
participate as a partner or in other ways in decisions on measures affecting
the management of the institution may not be exercised for the duration of
the prohibition.
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If managers have been prohibited from carrying out their activities
pursuant to subsection (1) sentence 2 number 3, the court having
jurisdiction at the domicile of the institution shall, at the request of the
Federal Financial Supervisory Authority, appoint the necessary persons
authorised to manage the institution's business and to represent it if, owing
to the prohibition, the institution no longer has the requisite number of
persons authorised to manage its business and represent it. Section 46a (2)
sentences 2 and 3, (3) sentence 1 and (4) to (7) applies as appropriate.
sec. 46a - Measures in cases of a danger of insolvency; appointment of
persons authorised to represent the institution
(1)
If the conditions specified in section 46 (1) sentence 1 obtain, the Federal
Financial Supervisory Authority may, to avert insolvency proceedings,
temporarily
1. issue a ban on sales and payments by the institution,
2. order the institution to be closed for business with customers, and
3. prohibit the acceptance of payments not intended for the discharge of
debts to the institution, unless the appropriate deposit guarantee
scheme or investor compensation scheme undertakes to satisfy in full
all those entitled to satisfaction.
The deposit guarantee scheme or investor compensation scheme may make
its commitment subject to the condition that incoming payments not
intended for the discharge of debts to the institution are held and
administered, in favour of the scheme, separately from the institution's
assets in existence at the time of the issuing of the ban on sales and
payments pursuant to sentence 1 number 1. After the issuing of the ban on
sales and payments pursuant to sentence 1 number 1, the institution may
complete the transactions in progress at the time of the issuing of the ban
and enter into new transactions insofar as these are necessary for
completing the former transactions, provided that and insofar as the
appropriate deposit guarantee scheme or investor compensation scheme
supplies the funds required for the purpose or undertakes to compensate
the institution for any diminution in its assets resulting from these
transactions as a whole, insofar as such compensation is needed for the full
satisfaction of all creditors. Moreover, the Federal Financial Supervisory
Authority may authorise exceptions to the ban on sales and payments
pursuant to sentence 1 number 1 insofar as this is necessary for the
administration of the institution. Judicial enforcements on, seizures of and
temporary injunctions against the assets of the institution shall not be
permissible for the duration of measures pursuant to sentence 1. The
provisions of the Insolvency Code (Insolvenzordnung) relating to the
protection of payment and securities transfer and settlement systems and
of collateral security of central banks shall apply as appropriate.
(2)
If, in the case of institutions organised in a form other than that of a sole
proprietorship, measures pursuant to subsection (1) sentence 1 have been
ordered, and if managers have been prohibited from carrying out their
activities, the court having jurisdiction at the domicile of the institution, at
the request of the Federal Financial Supervisory Authority, shall appoint the
necessary persons authorised to manage the institution's business and to
represent it if, owing to the prohibition, the institution no longer has the
requisite number of persons authorised to manage its business and
represent it. In the case of institutions entered in a public register, the
appointment or dismissal by the court of persons authorised to represent
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the institution, the scope of their representational authority and the
termination of their tenure of office shall be recorded officially. For the
duration of the conditions specified in sentence 1, the persons or governing
bodies entitled to do so under other legislation may not exercise their right
to appoint persons authorised to manage the institution's business and to
represent it.
(3)
The representational authority of a person appointed by the court shall be
determined by the representational authority of the manager in whose
stead this person has been appointed. This person's authority to manage
the institution's business – unless it is extended by the appropriate
governing bodies of the institution – shall be limited to the execution of the
measures necessary to avert insolvency proceedings and protect creditors.
(4)
The person authorised to manage the institution's business and to
represent it whom the court has appointed shall be entitled to the
reimbursement of reasonable cash expenses and to remuneration for his
activities. The court having jurisdiction at the domicile of the institution
shall determine such expenses and remuneration at the request of the
person authorised to manage the institution's business and to represent it
whom the court has appointed. No further appeal shall be permissible. The
final and absolute judicial decision results in judicial enforcement pursuant
to the Code of Civil Procedure.
(5)
For the duration of measures pursuant to subsection (1) sentence 1, a
person authorised to manage the institution's business and to represent it
whom the court has appointed may be dismissed only by the court, at the
request of the Federal Financial Supervisory Authority or of the institution's
governing body responsible for the debarment of partners from the
management and representation of the institution or for the dismissal of
persons authorised to manage the institution's business or to represent it,
and only if there is good reason for doing so.
(6)
The tenure of office of a person authorised to manage the institution's
business and to represent it whom the court has appointed shall expire in
any event if the measures pursuant to subsection (1) sentence 1 and the
order prohibiting the manager in whose stead the person was appointed
from carrying out his activities are revoked. If only the measures pursuant
to subsection (1) sentence 1 are revoked, the tenure of office of a person
authorised to manage the institution's business and to represent it whom
the court has appointed shall expire as soon as the persons or governing
bodies entitled to do so under other legislation have appointed a person
authorised to manage the institution's business and to represent it, and as
soon as a licence has been granted to this person, if necessary, pursuant to
section 32.
(7)
Subsections (2) to (6) shall not apply to public-law legal persons.
sec. 46b - Insolvency petition
(1)
If an institution becomes insolvent or overindebted, the managers and, in
the case of an institution organised in the form of a sole proprietorship, the
proprietor shall report this fact without delay to the Federal Financial
Supervisory Authority. Insofar as these persons are required under other
legislation to file a petition for the initiation of insolvency proceedings in the
event of insolvency or overindebtedness, the reporting requirement
pursuant to sentence 1 shall replace the requirement to file such a petition.
Insolvency proceedings over an institution's assets shall be initiated in the
event of insolvency or overindebtedness .The petition for the initiation of
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insolvency proceedings over the institution's assets may be filed by the
Federal Financial Supervisory Authority only. The court order to initiate
insolvency proceedings shall be specially communicated to the Federal
Financial Supervisory Authority.
(2)
If insolvency proceedings are initiated in respect of an institution which is a
participant in a system within the meaning of section 24b (1), the Federal
Financial Supervisory Authority shall without delay notify the agencies
whose names have been communicated by the other states of the European
Economic Area to the Commission of the European Communities. Sentence
1 shall apply as appropriate to system operators within the meaning of
section 24b (5).
sec. 47 - Moratorium, suspension of banking and stock market business
(1)
If there is reason to fear that credit institutions may encounter financial
difficulties which are likely to pose grave dangers to the national economy,
and particularly to the proper functioning of the general payments system,
the Federal Government may by way of a regulation
1. grant a credit institution an extension of time to discharge its
obligations, and order that judicial enforcements, seizures and
temporary injunctions against the credit institution, as well as the
initiation of insolvency proceedings over the credit institution's assets,
are impermissible for the duration of the extension;
2. order that credit institutions be temporarily closed for business with
customers and that they may neither make nor accept payments and
credit transfers connected with such business; it may limit this order to
certain types or categories of credit institutions and to particular types
of banking business;
3. order that stock exchanges within the meaning of the German Stock
Exchange Act (Börsengesetz) be temporarily closed.
(2)
Before taking measures pursuant to subsection (1) the Federal Government
shall consult the Deutsche Bundesbank.
(3)
If the Federal Government takes measures pursuant to subsection (1), it
shall specify by way of a regulation the legal consequences of these
measures for prescribed periods and deadlines in the fields of civil law,
commercial law, company law, bill of exchange law, cheque law and
procedural law.
Liquidity Regulation
sec. 1 - Scope of application
(1)
The present Regulation shall be applied to
1. credit institutions and
2. financial services institutions which
a) trade for their own account or
b) which are authorised as investment brokers, contract brokers or
portfolio managers to obtain the ownership or possession of money
or securities of customers or to trade in financial instruments for
their own account.
Only section 9 shall be applicable to e-money institutions.
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(2)
This Regulation shall not apply to branches within the meaning of section
53b (1) sentence 1 of the Banking Act if
1. the foreign supervisory authority responsible and the German Federal
Financial Supervisory Authority (hereinafter: BaFin) have reached
agreement on the mutual recognition of liquidity rules,
2. the branch is
management,
wholly
integrated
in
the
central
office’s
liquidity
3. the central office has declared in writing to BaFin that the branch’s
liquidity is assured at all times, and
4. BaFin has confirmed in writing that the conditions pursuant to Nos 1 to
3 are given.
sec. 2 - Adequate liquidity
(1)
The liquidity of an institution shall be deemed to be adequate if the liquidity
ratio to be calculated does not fall below the value of one. The liquidity ratio
denotes the ratio between the liquid assets available in the first maturity
band and the liabilities callable during this period. Liquid assets and
liabilities are to be assigned to one of the following maturity bands: due
1. on demand or up to one month (maturity band 1),
2. over one month and up to three months (maturity band 2),
3. over three months up to six months (maturity band 3),
4. over six months up to twelve months (maturity band 4).
(2)
The institution shall calculate observation ratios which give the ratio
between the respective liquid assets and the liabilities in the individual
maturity bands referred to in (1) sentence 3 Nos 2 to 4 . The observation
ratios are calculated in the same way as the liquidity ratio pursuant to (1)
sentence 2. If the liquid assets in one maturity band exceed the callable
liabilities, the difference shall be recognised as additional liquid assets in
the calculation of the observation ratio in the next-higher maturity band.
sec. 3 - Liquid assets
(1)
Subject to (3), the following shall be slotted into maturity band 1 as liquid
assets:
1. cash,
2. balances with central banks,
3. paper for collection,
4. irrevocable lending commitments received by the institution from
another credit institution or the Reconstruction Loan Corporation
(Kreditanstalt für Wiederaufbau,KfW),
5. securities which are not treated as fixed assets and are admitted for
trading on a regulated market as defined in Article 4 (1) No 14 of
Directive 2004/39/EC of the European Parliament and of the Council of
21 April 2004 on markets in financial instruments, amending Directives
85/611/EEC and 93/6/EEC of the Council and Directive 2000/12/EC of
the European Parliament and of the Council and repealing Directive
93/22/EEC of the Council (OJ EU L 145 p 1), last amended by Directive
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2006/31/EC of the European Parliament and of the Council of 5 April
206 (OJ EU L 114 p 60) in a country of the European Economic Area or
on a stock exchange pursuant to section 1 (3e) of the Banking Act
(listed securities), including paper transferred to the institution as a
transferee or borrower under repurchase or lending agreements,
6. those assets recognised by the European Central Bank or the central
bank of a country the unsecured liabilities of which would receive a
Credit Risk Standardised Approach (CRSA) weighting of 0 per cent
pursuant to section 26 Nos 1 or 2 of the Solvency Regulation
(Solvabilitätsverordnung, SolvV) in the relevant listing as collateral
eligible for refinancing; the credit institution must have a branch in the
country of domicile of the central bank if that central bank does not
belong to the European System of Central Banks; included are also
those assets transferred to the institution as a transferee or borrower
under repurchase or lending agreements, where these have not already
been recorded pursuant to No 5 (for zero-rated central banks, assets
eligible for refinancing),
7. collateralised debt securities not treated as fixed assets within the
meaning of section 20a of the Banking Act, including collateralised debt
securities transferred to the institution as a transferee or borrower
under repurchase or lending agreements, and
8. shares, not treated as fixed assets, in the amount of 90 per cent of the
respective repurchase prices in the following funds: Directive-compliant
funds pursuant to sections 46 to 65 of the Investment Act
(Investmentgesetz); special funds pursuant to sections 91 to 95 of the
Investment Act, the contractual terms of which provide for investment
principles and limits corresponding to those of Directive-compliant funds
pursuant to sections 46 to 65 of the Investment Act; and EU investment
units pursuant to section 2 (10) of the Investment Act, provided that
the repurchase and settlement arrangements for units in foreign funds
are the same as for units in the abovementioned domestic funds.
(2)
The following liquid assets are to be recorded in maturity bands 1 to 4
according to their residual maturities but subject to section 3:
1. loans and advances to central banks
2. loans and advances to credit institutions,
3. loans and advances to customers,
4. bills of exchange eligible for refinancing with central banks which do not
already fall under Nos 2 or 3,
5. asset claims of the lending institution to the return of the securities lent,
6. debt securities other than those included under (1) and other fixedinterest securities including fixed-interest securities transferred to the
institution as a transferee or borrower under repurchase or lending
agreements,
7. asset claims of the transferor to the retransfer of securities under
genuine sale and repurchase agreements,
8. money claims of the transferee arising from sales with an option to
repurchase in the amount to be repaid, provided that the current
market value of the securities transferred is lower than the agreed
amount to be repaid, and
9. equalisation claims on the public sector (especially Currency Conversion
Equalisation Fund) including debt securities arising from their exchange
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where they are not included in (1) No 5, provided that the respective
residual maturities on the reporting date do not exceed one year.
(3)
The following are not liquid assets within the meaning of (1) and (2):
1. loans and bills of exchange for which individual value adjustments have
been made, provided that they are currently impaired,
2. participating interests and shares in affiliated companies,
3. repurchased own-debt securities which fail to meet the provisions of
section 20a of the Banking Act,
4. securities transferred under repurchase or lending agreements, for the
duration of the agreement on the part of the transferor or lender,
5. securities pledged as collateral and not available to the institution for
the period they constitute collateral, unless they are pledged to a
central bank of the European System of Central Banks, and
6. investment units other than listed in (1) No 8, where they are not
included in (1) No 5 as liquid assets.
sec. 4 - Liabilities
(1)
The following are to be recorded in maturity band 1 as liabilities:
1. 40 per cent of the liabilities to credit institutions due on demand,
2. 10 per cent of the liabilities to customers due on demand,
3. 10 per cent of savings deposits within the meaning of section 21 (4) of
the Bank Accounting Regulation,
4. 5 per cent of the contingent liabilities from rediscounted bills,
5. 5 per cent of the contingent liabilities from guarantees and indemnity
agreements
6. 5 per cent of the amount of liability from the pledging of collateral for
third-party liabilities,
7. 20 per cent of placement and underwriting commitments and
8. 20 per cent of undrawn, irrevocable lending commitments, other than
those to be included as provided in (2) No 12 or (3).
(2)
The following liabilities are to be recorded in maturity bands 1 to 4
according to their residual maturities:
1. liabilities to a central bank
2. liabilities to credit institutions, unless they constitute liabilities to be
included in number 3,
3. 20 per cent of the liabilities of the central institutions of the savings
banks and credit cooperative sectors to their regional institutions and of
those regional institutions to their affiliated savings banks and credit
cooperatives,
4. liabilities to customers, unless they constitute liabilities to be included in
number 12,
5. asset liabilities, ie obligations of the borrowing institution to return
borrowed securities,
6. asset liabilities, ie liabilities of the transferee resulting from the
obligation to return securities under repurchase agreements,
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7. money liabilities of the transferor arising from sales with an option to
repurchase, provided that the current market value of the securities
transferred is lower than the agreed amount to be repaid,
8. securitised liabilities,
9. subordinated liabilities,
10. capital represented by participation rights
11. other liabilities and
12. 20 per cent of the undrawn eligible liquidity facilities within the meaning
of section 230 (2) of the Solvency Regulation which cannot be
terminated unconditionally at any time without notice if a drawing
between the refinancing dates for the securitisation transaction is ruled
out.
if the respective residual maturities on the reporting date do not exceed
one year.
(3)
Irrevocable lending commitments for investment loans and loans secured
by mortgages, to be disbursed in line with the progress of construction,
which are expected to be used during the 12 months following the reporting
date are to be recorded as follows:
1. 12 per cent in maturity band 1,
2. 16 per cent in maturity band 2,
3. 24 per cent in maturity band 3, and
4. 48 per cent in maturity band 4.
sec. 5 - Securities repurchase and lending agreements
(1)
Securities transferred under genuine sale and repurchase agreements shall
be deemed to be part of the portfolio of the transferee, who must include a
resulting asset liability obligation to return the securities. The transferee
shall recognise a money claim on the transferor in the amount of the
agreed repayment. The transferor shall, instead of the securities, record an
asset claim to the return of the securities. It shall include a money liability
in the amount of the agreed repurchase price to the transferee.
(2)
Securities acquired by the transferee under sales with an option to
repurchase shall be deducted from the portfolio of the transferor, who shall
recognise instead the money received from the transferee. The transferee
shall, instead of the money paid, count the securities towards its holding. If
the market price of the transferred securities is below the amount of the
agreed repurchase price,
1. the securities transferred shall be counted towards the holding of the
transferor, who shall recognise a money liability to the transferee in the
amount of the agreed repurchase price, and
2. a money claim on the transferor in the amount of the agreed repurchase
price shall be included by the transferee, who shall deduct the securities
from its holding.
(3)
Securities transferred under lending agreements shall be deducted from the
holding of the lender and counted towards the portfolio of the borrower.
The borrower shall recognise an asset liability obligation to return the
securities, the counterpart of which is an asset claim of the lender in the
same amount.
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sec. 6 - Basis of assessment
(1)
Below is the respective basis of assessment for the various items:
1. for liquid assets pursuant to section 3 (1) Nos 5 and 7: the respective
marked-to-market prices of the underlying securities.
2. for liquid assets pursuant to section 3 (1) No 6: the figures for the
underlying assets as derived using the relevant valuation principles by
the central bank concerned less the central bank’s haircut.
3. for liquid assets within the meaning of section 3 (1) No 8: the
repurchase prices,
4. for liquid assets pursuant to section 3 (2) No 8 and liabilities pursuant to
section 4 (2) Nos 7 to 9: the repayment amounts,
5. for securities items and securities-related asset claims and liabilities
under repurchase and lending agreements: the respective market prices
of the securities marked to market,
6. for other liquid assets and liabilities: the respective book values.
Market prices are the official prices on a given reporting date or, if
unavailable, the market prices established by the institution. If the
securities are officially listed on several markets, an institution shall use
market prices according to a method set internally by that institution; the
method is to be uniform and permanent and documented. The institution is
to document, and submit to BaFin upon request, its derivation of market
prices for the most recent reporting date, the reporting dates of the last 24
months and for the current reporting period. Except for liquid assets
pursuant to sentence 1 No 2 , debt securities and other fixed-interest
securities in the portfolio may be reported at 90 per cent of their book
value, and listed shares and other variable-rate securities in the portfolio at
80 per cent of their book value, unless the institution uses the mark-tomarket method. Country risk value adjustments, general value adjustments
and individual value adjustments shall be deducted from the book values of
the asset items unless they prevent the asset items referred to in section 3
(3) 1 from being recognised.
(2)
If an institution is not able for technical reporting reasons to deduct value
adjustments from the asset items concerned it may use a simplified
procedure to deduct the value adjustments. In this procedure, and in line
with the proportion of recognisable liquidity items in the total of all assets
for which the value adjustments are made, the value adjustments set up
are to be deducted from the liquid assets
1. in maturity band 1 (standardised procedure) or
2. in all maturity bands (alternative procedure)
If an institution decides to use the alternative procedure, it shall include
when deducting the value adjustments the maturity structure underlying
the liquid assets. Value adjustments to specific assets which make claims
and bills ineligible for recognition may be left out of the calculation.
Institutions which intend to use the simplified procedure must notify BaFin
and the Deutsche Bundesbank before using it for the first time. The
notification is to state the value adjustments for which the procedure is to
be used and what assets are to be included. BaFin can prohibit use of the
simplified procedure if there is justified reason to believe that the liquidityrestricting effects resulting from value adjustments would not be
adequately replicated.
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Recent cases
Section 5 of the Solvency Regulation applies mutatis mutandis for
converting forexdenominated asset and liability items.
sec. 7 - Residual maturities
The residual maturity is deemed to be
1. the period of time between the respective reporting date and the due date of
the respective liquid assets and liabilities, subject to Nos 2 to 6,
2. for uncalled deposits at notice: the respective period of notice plus a noncalling period,
3. for assets and liabilities to be redeemed in regular instalments, regardless of
whether the partial amounts contain interest or not: the period between the
respective reporting date and the maturity date of the partial amount,
4. for asset claims from genuine securities repurchase agreements and lending
transactions within the meaning of section 3 (1) and the resulting liabilities
and securities items of the transferor arising from sales with an option to
repurchase: the residual duration of the agreement,
5. for asset claims arising from genuine repurchase and lending agreements
involving securities other than those under No 4, and for consequent asset
liabilities and transferor securities items arising from sales with an option to
repurchase: the residual duration of the transaction plus the residual
maturities of the securities at the end of the transaction, and
6. for money claims and liabilities arising from genuine sales and repurchase
agreements and sales with an option to repurchase: the residual transaction
maturity.
Early termination options shall be recognised for liabilities. However, they shall
not be recognised for claims and securities in a holding. In the case of assets and
liabilities which are redeemed in regular instalments, the amounts to be repaid
shall be assigned to the relevant maturity bands up to the value of the respective
instalments. Overnight money and call money shall not be considered to be due
on demand. They are to be treated as time deposits for one day.
sec. 8 - Rules specific to building and loan associations
In derogation from sections 3 to 7, building and loan associations must count 10
per cent of the book value of the difference between deposits under “savings and
loan” contracts and the loans under “savings and loan” contracts towards
liabilities under section 4 (1) in maturity band 1. The liquid assets and liabilities
arising from the noncollective business of building and loan associations shall be
recognised pursuant to the provisions laid down in sections 3 to 7.
sec. 9 - Investment limitations for electronic money institutions
(1)
E-money institutions shall invest funds in at least the amount of their
liabilities arising from the as yet undrawn electronic money only in the
following assets:
1. Cash and equivalent items,
2. Assets, the performance of which is owed or expressly guaranteed by a
central government or central bank, provided that the Credit Risk
Standardised Approach (CRSA) risk weighting for uncollateralised
liabilities owed by that central government or central bank pursuant to
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section 26 Nos 1 to 3 of the Solvency Regulation is no higher than 0 per
cent,
3. Assets, the performance of which is owed or expressly guaranteed by
the European Communities,
4. Assets, the performance of which is owed or expressly guaranteed by
one of the counterparties named in section 25 (3) Nos 1 to 4 of the
Solvency Regulation,
5. Assets which are demonstrably secured by collateral in the form of debt
securities of a counterparty named in section 25 (3) Nos 1 to 4 of the
Solvency Regulation,
6. Sight deposits at credit institutions, the owed unsecured liabilities of
which receive a maximum CRSA risk weighting of 20 per cent pursuant
to section 31 Nos 1 or 2 of the Solvency Regulation, and
7. High-quality securities under section 303 (3) sentence 2 of the Solvency
Regulation, which are not included in Nos 2 to 5 and are not issued by
companies which hold a significant interest pursuant to section 1 (9) of
the German Banking Act in an e-money institution or which are to be
included in the consolidated accounts of such companies.
The assets named in sentence 1 are not to be
assets named in sentence 1 Nos 2 to 5 and 7
The investments named in sentence 1 Nos 6
exceed 20 times the own funds of a given
overshoot is to be notified immediately to
Bundesbank.
(2)
rated as fixed assets. The
must be sufficiently liquid.
and 7 may not, in total,
e-money institution. Any
BaFin and The Deutsche
If owing to the undrawn electronic money the value of the assets named in
(1) fall short of the level of liabilities, the e-money institution shall be
obligated to terminate the shortfall without delay. To that end, BaFin may
temporarily permit the lower of the following figures to be covered by
assets other than those specified in (1):
1. a maximum of 5 per cent of the liabilities deriving from electronic
money as yet undrawn, or
2. own funds
(3)
E-money institutions shall submit reports to the Deutsche Bundesbank on
the requirements under (1) as at the reporting date at the end of a
calendar half-year using the form in annex 1; the submission is to be made
by the 15th business day of the month following the reporting date. The
report is to be submitted electronically. The Deutsche Bundesbank
publishes on the internet the format to be used for electronic data
submission and the submission procedure. 4It forwards reports to BaFin.
sec. 10 procedures
(1)
Utilisation
of
internal
liquidity
risk
and
measurement
To assess the adequacy of liquidity, the institution may, at its discretion on
a permanent basis and with the assent of BaFin, use its own liquidity risk
measurement and management procedure in place of sections 2 to 8, if the
requirements under (3) have been met and if BaFin has confirmed in
writing its suitability for the purposes of this regulation, upon application
from the institution concerned. BaFin can make its assent contingent upon
collateral clauses, especially conditions, and revoke assent already granted
if the institution no longer meets the preconditions of (3).
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(2)
The suitability of an internal liquidity risk measurement and management
procedure is assessed on the basis of an examination under section 44 (1)
sentence 2 of the Banking Act conducted by BaFin in cooperation with the
Deutsche Bundesbank; once the suitability has been officially confirmed, it
is reviewed in follow-up examinations. Material changes to the liquidity risk
measurement and management procedure shall necessitate renewed
confirmation of suitability under (1).
(3)
The institution shall in particular meet the following requirements for the
use of an internal liquidity risk measurement and management procedure:
1. The liquidity risk measurement and management procedure guarantees
(while taking into account the situation specific to a given institution,
the type and complexity of business and the size of the institution),
adequate ongoing calculation and monitoring of the liquidity risk and
describes the liquidity situation more incisively and appropriately than if
sections 2 to 8 were applied. In particular, the liquidity risk
measurement and managment procedure is to convey information about
expected shortterm net outflows of funds, the possibility of unsecured
borrowing and the effect of stress scenarios. The institution shall
regularly review compliance with the requirements under sentence 1.
2. The institution has set limits (appropriate quantitative ceilings for
liquidity risks, including those in stress scenarios) which it reviews at
regular intervals; the limits shall have been set on the basis of the
liquidity risk measurement and management procedure. To that end,
the institution identifies ratios in its liquidity risk measurement
procedure which are especially suited to providing an aggregate picture
of the risk of insufficient liquidity; the institution documents what level
these indicators must reach for it to deem itself exposed to tangible,
medium and high risk of insufficient liquidity, and what measures are
triggered when one of the ratios hits one of the specified risk levels.
3. The institution shall notify the Deutsche Bundesbank and BaFin
immediately in writing if one of the ratios under No 2 exceeds the level
for a medium or high risk of insufficient liquidity; it shall report on
measures it has adopted, as well as those it intends to adopt, to avert
the danger. The foregoing shall be without prejudice to reporting of the
ratios pursuant to section 11 below.
4. The liquidity risk measurement and management procedure and the
internal limit system are used for internal liquidity risk management and
in the institution’s corporate governance.
(4)
An institution domiciled in Germany which is a subordinate enterprise in a
group of institutions or a financial holding group, and which meets the
provisions laid down in section 2a (1) Nos 1 to 5 of the Banking Act, or
which is a parent company and meets the provisions laid down in section 2a
(6) sentence 1 Nos 1 and 2 of the Banking Act may, at its discretion on a
permanent basis and with the permission of BaFin, refrain from applying
sections 2 to 8 if the group of institutions or financial holding group to
which the institution belongs uses an internal liquidity risk measurement
and management system and Bafin has confirmed the suitability of that
system in writing. (1) to (3) shall apply mutatis mutandis.
sec. 11 - Reporting of the ratios
(1)
Institutions shall submit reports to the Deutsche Bundesbank on the
requirements under section 2 as at the reporting date at the end of a
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month, using the forms in annexes 2 and 3; the submission is to to be
made by the 15th business day of the month following the reporting date.
Upon application from an institution, BaFin may approve an extension of
the deadline. For guarantee banks and credit guarantee associations,
sentence 1 applies with the proviso that the reports are to be submitted
only twice a year on the status as at the reporting date at end-May and
end-November, in each case by the 15th business day of the month
following the reporting date.
(2)
If an institution exercises the option of using an internal liquidity risk
measurement and management procedure pursuant to section 10, BaFin
shall, in derogation from (1), define, on a case-by-case basis, the content
and form of the monthly reporting requirements in its written confirmation
of the suitability of the liquidity risk measurement and management
procedure under section 10.
(3)
The reports pursuant to (1) and (2) are to be submitted electronically. The
Deutsche Bundesbank publishes on the internet the format to be used for
electronic data submission pursuant to (1) and the submission procedure. It
forwards the reports to BaFin. Institutions shall keep the reports under
annexes 2 and 3 for the current calendar year and the two preceding
calendar years.
39