Newsletter
Issue No. 5, August 2016
MESSAGE FROM THE CHAIRMAN
Dear EFDI Members,
members an expanded internal area
with a variety of functions and tools,
such as working group and committee
sub-pages, a calendar function and a
section dedicated to member surveys.
The last weeks since the relaunch the
website was operated in a test phase.
After a review of the feedback, we will
describe the functions of the website
comprehensively in the next EFDI
Newsletter.
Welcome to the third edition of our EFDI
Newsletter 2016.
First of all, I would like to thank all
members who have contributed to this
newsletter. Once again I am delighted
we have been able to compile numerous
very interesting articles and news from
our membership for you.
EFDI has already achieved a number of
ambitious goals in the first half of 2016.
For example, we recently successfully
relaunched the EFDI website following
a comprehensive review. Apart from an
updated and mobile device compatible
look, the new website offers all EFDI
As you may have noted, the EFDI H2C
initiative was resoundingly successful.
Following two years of intensive negotiations and collaboration between EFDI
members and the European Banking
Authority (EBA), EBA finally confirmed
the EFDI model Cooperation Agreement
and supporting Rule Book meets its
guidelines and further “encourages EFDI
members […] to enter into this agreement”. More information in this respect
can be found on page 3.
Furthermore, the Commissions’ proposal on a European Deposit Insurance
Scheme (EDIS) has kept us on the go the
last few months. In this context, the first
joint Briefing Session in Brussel on 14
June 2016 was a great success. For the
IN THIS ISSUE
The EFDI HOME/HOST (H2C) Cooperation Initiative
3
Transposition of the EU DIrective 2014/49/EU in Slovenia
4
Transposition of the EU DIrective 2014/49/EU in Sweden
5
FITD update
5
The esisuisse General Assembly of Members
6
4th esisuisse annual report
6
German statutory deposit guarantee scheme for private banks introduces
payment commitments 7
The struggle for the preservation of a two-tier compensation system in Germany 8
International Conference on Financial Stability: „Diversity and Harmonisation of
Deposit Insurance“ in Paris
9
EFDI/EBF Briefing Session on EDIS in Brussels on 14 June 2016 10
Learning by doing – Communicators’ meeting in London on 13 June 2016
11
EFDI - EU Committee Meeting in Vienna on 23 June 2016
13
panel discussion we could win some of
the key players in the EDIS arena. With
Detlef Fechtner, the EU correspondent of
the Börsen-Zeitung, moderating, a lively
debate developed between Ms Esther
de Lange, Mr Patrick Pearson, Mr Uwe
Fröhlich and Mr Daniel Gros (page 10).
I hope many of you are enjoying a well
deserved break from your daily work
before we all meet in Vilnius for the EFDI
Annual General Meeting & International
Conference 2016. Preparations are already in full swing to make this year‘s
events a success. Further information on
the event can be found in the Messages
from the Board on page 2
Wishing you an enjoyable lecture,
Your
Dirk Cupei
FOR YOUR DIARY
September
06.09. EFDI Credit Cooperative
Working Group, Vienna
09.09. Cambridge International Sym
posium: DGS Core Principles & Resolution Conference, Cam
bridge, UK
28.09.- EFDI Annual Meeting &
01.10. International Conference, Vilnius, Lithuania
October
23-28.10.IADI Annual Meeting, Seoul, South Korea
MESSAGE FROM THE BOARD
Dear EFDI Members,
The EFDI Board Members would like
to take this opportunity to inform you
about the program of the upcoming
EFDI AGM & International Conference
taking place in Vilnius, Lithuania, from 28
September to 1 October 2016.
Conference and Meeting Schedule
• Wednesday, 28 September:
Closed session EFDI members only
• Thursday, 29 September:
EFDI Annual General Meeting and International Investor Compensation Fund Meeting (IICFM)
• Friday, 30 September:
EFDI International Conference
• Saturday, 1 October:
Excursion day
Preparatory meetings of working
groups and committees on 28 September 2016
Part I
14.00 – 15.00
EU Committee
15.00 – 16.00
H2C Subgroups
15.00 – 15.30
Credit Cooperative Working Group
15.30 – 16.00
Research Working Group and Sub-
groups
Part II
16.00 – 17.00
PR Committee
16.00 – 17.00
Steering Group
17.00 – 18.00
Banking Union Working Group and Subgroups
18.00 – 18.30
ICS Working Group
Registration for AGM and International Conference
For those of you who have not registered yet, we kindly ask you to do so by 16
September 2016. You can register online
for the different events of the 2016
EFDI Annual Meeting and International
Conference via the EFDI registration
platform. To access it, please use the following link: http://www.publicumevents.
com/conferencenew/page/register.
Exhibition space
As already announced there will be
facilities available for members to
present themselves on the AGM. Please
bring along your information material,
brochures, etc. if you wish to make use
of this opportunity.
EFDI @Twitter
On the occasion of our annual meetings
there will also be a hashtag #efdi16,
which we invite you to use to twitter
about the event.
With regard to the program of the EFDI
General Assembly and International
Conference 2016, we would like to
highlight several aspects to you:
Candidates for EFDI Board position
This year‘s annual meeting will also
incorporate the election of Directors in
accordance with Article 21 of the EFDI
statutes. Please therefore take note, that
if you wish to candidate yourself you
should do so via written communication
(including email) by no later than 29
August 2016 to [email protected].
Candidates for EFDI Auditor position
As announced via email, we will be
electing a new internal auditor. Therefore, each member interested in standing
for the position is kindly requested to
signal this via written communication
(including email) to the EFDI Secretariat,
[email protected].
International Investor Compensation
Fund Meeting (IICFM)
On the occasion of the EFDI AGM we are
currently preparing the International
Investor Compensation Fund Meeting
2016 along with the EFDI Annual
General Meeting and International
Conference 2016. We expect the IICFM to
be a good opportunity for international
Investor Compensation Schemes to
meet and discuss the current issues, developments and experiences in the field
of investor compensation. The IICFM will
take place on 29 September 2016. For
one afternoon, we would like to discuss
together with Investor Compensation
Schemes from all over the world the
current issues in the field of investor
compensation as well as recent payout
experiences.
International Conference Program
Following an exciting year for European
Deposit Guarantee Schemes, this year‘s
EFDI International Conference is dedicated to the recent proposal of the European Commission for the establishment of
a European Deposit Insurance Scheme
(EDIS). We would like to discuss with
you the concept of a European Deposit
Insurance Scheme as well as the options,
opportunities and challenges associated
with it. The idea is to take the “official
reasoning” for EDIS – overcoming the
loss of credibility in banking sectors and
deposit insurance schemes prevailing
in some Member States – as an opportunity to look beyond EU borders and
discuss international approaches and
experiences in the handling of credibility
gaps and the recovery of trust.
A regularly updated program can be
accessed via the
EFDI website and
the
e-platform.
We hope that many of you will be able to
attend the events in Lithuania and look
forward to meeting you all there.
Your EFDI Board
2
EFDI Inside
THE EFDI HOME/HOST (H2C) COOPERATION INITIATIVE
- Or how to collectively organize an efficient cross-border cooperation to payout depositorscin the event of a bank failure in the
European Economic Area In Europe, the deposit guarantees
schemes (DGSs) of each country cover
banks that
have their
registered
office in
that country
as well as their branches in another
European country. However, in case
of European branches, the DGSD2
directive requires the host DGS to act as
a channel for compensating the customers of these branches, while operating
according to the instructions and under
the responsibility of the home DGS. This
system applies not only to European
Union countries but also to those of the
European Economic Area, i.e. 31 countries in all, with a variety of languages,
currencies,
jurisdictions
etc.
For all concerned DGSs, meeting these
new requirements and orientations
implied building collectively new ways
to organize their cooperation. With a
French impulse and a coordination ensured by 4 additional countries (Belgium,
Hungary, Italy and the UK), more than 20
EFDI members engaged into two years
of intense cooperation within what was
called the “Home/Host (H2C) initiative” –
all united towards one objective: pay out
depositors as quickly as possible in case
of a bank failure.
From this intense cross-cultural cooperation, a draft agreement came out,
written by lawyers from 14 different
jurisdictions. The group also elaborated
a Rulebook for standardized technical
aspects of the cooperation and Schedules to allow to deviate from the Rulebook
on a bilateral basis, as long as those
deviations stay compatible with the EBA
Guidelines.
With these documents, EFDI members
have defined an
efficient way to set
a full functional and
technical interoperability among them,
solving the many
issues they were
facing: processes,
IT requirements,
crisis communication,
communication to
depositors, responsibilities, financial relations, cost sharing.
The agreement is about organizing
concretely cooperation between different institutions, including by defining
a common format for data filing and
sharing, in order to payout depositors as
quickly as possible.
The EFDI H2C Cooperation Agreement
and Rulebook constitute EFDI’s answer
to the challenges raised by the Banking
Union in the field of cross-border cooperation, transfer of contributions and
mutual lending between EU and EEA
Deposit Guarantee Schemes.
An unprecedented cross-border interoperability
This work has been carried in close
cooperation with the EBA to ensure
that EFDI documents meet the requirements of the EBA Guidelines. Now EFDI
members have come up with a cooperation agreement that not only has been
approved by EFDI EU Committee during
its meeting in Vienna on 23 June 2016
(and validated through a final review
since then); but also agreed upon by the
EBA.
In a recent letter to EFDI Chair, Mr
Dirk Cupei, published on EBA website,
Mr Andrea Enri, an EBA Chair, stated
that “the entry [...] into the [EFDI H2C]
Agreement provides sufficient grounds
to report compliance [...] with the
Guidelines [...].” On this ground, the
EBA “encourage[s] EFDI members, and
the relevant designated authorities in
their Member States, to enter into this
Agreement.”
This achievement rewards EFDI’s efforts
to contribute to the stability of financial
system by bringing together European
practitioners’ expertise and working
closely with European regulators.
Thierry Dissaux, Chairman of the French
DGS, FGDR, declared: “European practitioners have worked together to establish
a multilateral agreement that all EFDI
members should be able to sign up, and
that the EBA is happy with. Thanks to
their involvement, EFDI members may
be proud of what they have achieved, a
definition of all the needed prescriptions
on a technical and operational basis,
to ensure a full interoperability of
all deposit insurers within the EU
and the European economic area. This
is probably unprecedented in deposit
guarantee business”.
Watch the H2C video on FGDR website!
3
News from Members
TRANSPOSITION OF THE EU DIRECTIVE 2014/49/EU IN SLOVENIA
The Directive 2014/49/EU on deposit
guarantee schemes (further referred
to as DGSD), featured a somewhat late
implementation in the Republic of Slovenia. It was ultimately transposed into
national law through the adoption of the
Deposit Guarantee Scheme Act (Official
Gazette of the Republic of Slovenia, No.
27/16), which came into force on 12 April
2016.
The new regime maintains the deposit
guarantee up to EUR 100,000, but
gradually shortens the deadlines for
the repayment of guaranteed deposits
and further increases the requirements
to inform depositors with regard to the
guarantee.
One of the key innovations brought by
the new Deposit Guarantee Act is the
establishment of an ex-ante deposit
guarantee fund, to which funds will be
contributed by banks, and from which
guaranteed deposits will be repaid. Up
until the adoption of the new Deposit
Guarantee Scheme Act, banks had to
hold investments in proportion to their
share in financial instruments having
specific characteristics (debt securities
that meet the criteria for eligibility as
collateral for Eurosystem claims or other
Republic of Slovenia debt securities).
The deposit guarantee scheme in
Slovenia had been financed by ex-post
contributions by the banks. In the event
of the collapse of an individual bank
contributions would be called in by the
Bank of Slovenia, to raise funds for the
repayment of the guaranteed deposits
at the bank in question.
The new fund’s target level was set by
the Bank of Slovenia at 0.8% of total guaranteed deposits, with total guaranteed
deposits amounting to EUR 16.2 billion
as at 31 December 2015. Funds will be
paid in by banks in annual contributions
until the fund’s target level is reached (in
the initial stage cash contributions will
most likely be favored). Contributions to
the new ex-ante deposit guarantee fund
shall be collected in compliance with
Guidelines on methods for calculating
contributions to deposit guarantee schemes, as well as Guidelines on payment
commitments under the DGSD, as adopted by the European Banking Authority
(EBA). The collection process is expected
to begin in the second half of 2016. In
the event of the deposit guarantee fund
not having sufficient funds at its disposal
to repay guaranteed deposits, the banks
would have to provide additional funds
via extraordinary contributions, and the
law provides beside the option of raising
funds on the market also the possibility
of a short-term loan to be provided to
the fund by the government.
Another innovation brought by the
law is the possibility of using the fund’s
assets also for the purposes of bank resolution, when depositors’ access to guaranteed deposits is being maintained.
This element works in close correlation
with the Directive 2014/59/EU on establishing a framework for the recovery
and resolution of credit institutions and
investment firms, which was implemented in Slovenia on 25 June 2016, through
the adoption of the respective Resolution and Compulsory Dissolution of Credit
Institutions Act (Official Gazette of the
Republic of Slovenia, No. 44/16).
The deposit guarantee scheme in
Slovenia is administered by the Bank
of Slovenia, which acts as the national
Designated Authority pursuant to Article
2(1) point (18) of the DGSD. The Bank
of Slovenia establishes and manages
the deposit guarantee fund, collects
the banks’ contributions to the fund,
oversees the procedures and arrangements for the repayment of coverage
of guaranteed deposits, conducts stress
tests, etc. The deposit guarantee scheme
tasks are conducted by an independent
unit within the Bank of Slovenia, which
also covers the activities of a National
Resolution Authority (a task vested
with the Bank of Slovenia as well). With
respect to the exercise of powers and
tasks related to the deposit guarantee
scheme, the Bank of Slovenia works with
the authorities designated for administering the deposit guarantee schemes
within the EU, the respective resolution
authorities and other relevant authorities of EU Member States. In its capacity
as the designated authority for administering the deposit guarantee scheme in
Slovenia, the Bank of Slovenia is also an
active member of EFDI and IADI.
Insofar the Bank of Slovenia has not
had to exercise its powers under the
new DGSD inspired deposit guarantee
scheme.
4
News from Members
TRANSPOSITION OF THE DGSD IN SWEDEN
On 1 July the recast DGSD was implemented into Swedish law. The compensation limit
is from this
day changed
from EUR
100 000 to SEK 950 000 for depositors
in Sweden. For depositors in a branch
of a Swedish institution the compensation limit is expressed in the amount
and currency that applies in the host
country (EUR 100 000 or GBP 75 000).
The reasons for these changes are to
eliminate currency risk for the depositors
and to ensure a level playing field for the
institutions.
The limit for Temporary High Balances
(THBs) is set at SEK 5 000 000 and the
longest possible period for the related
transactions of 12 months will apply.
All activities mentioned in Article 6.2 of
DGSD except marriage will be covered.
Topping-up is retained in the Swedish
Deposit Guarantee Act, both for EEA and
foreign branches. The topping-up option
is also extended to include a branch of a
Swedish institution operating in another
EEA country. The branch can apply to the
Swedish DGS for higher protection for
branch deposits if the host country no
longer allows topping-up and the host
DGS covers a higher amount or has a
wider scope related to THBs.
The requirement of the DGS fund
reaching a target level of 0.8 percent is
already met in Sweden. The fund was 2.3
percent of covered deposits by year-end
2015. The target level requirement has
been implemented as a minimum target
level and the institutions will continue
to pay annual fees to the Swedish DGS.
From 2017 a new risk-based method for
calculating the fees will be used, based
on EBA’s guidelines.
The 7 day payment period is implemented at once and a new payment method
will be introduced. The new method
will allow depositors to, at the time of a
compensation case, register an account
online or go to any bank and register an
account to which the reimbursement
can be sent.
For more information please see https://
www.riksgalden.se/en/Deposit_insurance/
FITD UPDATE
1.
2.
In Italy the BRRD and the DGSD
have been
recently
implemented into the
national
legislation. FITD has been finalizing
the amendment of its Statutes for
a complete implementation to be
approved by the General Assembly
late July 2016.
A recent amendment to FITD
Statutes, approved at the Board
Meeting on 17 June 2016, confirmed the Voluntary Intervention
Scheme (VIS). Its purpose is to
provide support measures, if
necessary, for FITD Member banks
in difficulties without raising any
State aid concerns. The possibilities
of FITD interventions have been
extended to in cases of troubled
banks for which the Bank of Italy
has already adopted measures for
early intervention.
3.
At the same Board Meeting, the
financial resources for the Scheme
were raised from 300 to 700 million
Euros.
6.
Recently the VIS intervened for a
recapitalization of a Member bankfor 280 million Euros. The injection
would enable the Bank to restore
prudential capital requirements,
underpin the business plan and
relaunch.
FITD was also engaged in:
4.
FITD has made all changes necessary to its current risk-based contribution system to comply with the
new rules. The impact assessments
have been completed. Contacts
with the designated authority for
approval are currently ongoing.
5.
SCV project: FITD is finalizing the
payout procedures and guidelines
after a broad consultation with
Member Banks.
•
•
•
•
In the three months to June, FITD
through its Mandatory Scheme,
intervened in a case of liquidation
of a small regional bank.
CP self-assessment;
Coordination of the two ERC Subgroups (Relations between DGSD
and CPs and State Aid Rules and
DGS Interventions);
H2C initiatives;
Leadership of the Banking Union
Working Group: the Paper on “Preliminary views on EDIS” after been
submitted to and approved by the
EU Committee, was published on 2
May 2016.
5
News from Members
THE ESISUISSE GENERAL ASSEMBLY OF MEMBERS
On June 3rd, Barend Fruithof chaired the
General Assembly of esisuisse for the
first time as president of the organisation. He led through the agenda in a very
professional and efficient way so that all
items passed smoothly.
Worth mentioning is the election of new
members of the Board of Directors. In
order to gain more independence from
the banks two newly elected members from outside the banking sector
joined the board. Fruithof particularly
welcomed this choice as it fulfills one of
the recommendations of the so-called
“Brunetti report” by a group of experts
on the strategy of the Swiss financial
market.
In his address, Fruithof analysed the
situation of the banking sector worldwide and mentioned its importance for
Switzerland. In this context, he pointed
out esisuisse’s role in strengthening the
sector’s reputation, creating confidence and adding to its stability. He also
explained esisuisse’s strategy in view of
the above-mentioned report. He closed
the meeting by thanking the outgoing
members of the board. A special thank
went to his predecessor Dr. Patrik Gisel
who presided esisuisse from January
2009 to November 2015.
Development Review Committee (EDRC)
at the OECD in Paris and has continued
to publish articles on topics related to
monetary and financial stability as well
as the process of international cooperation in these areas. In his presentation
entitled « The Ultra Easy Monetary Experiment: Complexity, Tail Risks and Bad
Outcomes » he painted a rather pessimistic picture of the future of the global
economy. After his speech, he was
joined on stage by Oliver Banz, Deputy
Chairman, and Marija Hrbac, Director,
State Agency for Deposit Insurance and
Bank Rehabilitation, Croatia, for a panel
discussion on the same topic.
After the statutory part, Prof. William
White was introduced as guest speaker.
He is the chairman of the Economic and
4TH ESISUISSE ANNUAL REPORT
esisuisse has published its 4th annual
report and it is available to view and
download under Publications / Annual
reports on its website. The annual report
2015 has been produced in English,
German, French and Italian.
All over the world, water is becoming an
increasingly valuable resource. There are
many reservoirs in the Swiss mountains
that store water so it can be converted
into sustainable, clean and economical
energy if required. The Swiss depositor
protection system works in a very similar
way. Only in this case the liquidity is held
by the banks, so if there is an emergency
it can be used sustainably, efficiently and
flexibly by esisuisse.
Link Tip: European Parliament Supporting Analyses
The European Parliament website
offers a database that contains
the research papers produced by
the European Parliament’s various
research services, in particular
studies, in-depth analyses and
briefings produced by policy
departments, the Economic Governance Support Unit and the Directorate for Impact Assessment
and European Added Value. These
documents aim to support the
work of the various parliamentary
bodies.
The database can be accessed
here.
6
News from Members
GERMAN STATUTORY DEPOSIT GUARANTEE SCHEME FOR PRIVATE
BANKS INTRODUCES PAYMENT COMMITMENTS
The statutory deposit guarantee scheme
for private banks in Germany, the “Ent-
schädigungseinrichtung deutscher Banken GmbH” (EdB), allows banks assigned
to EdB to pay 30% of their contributions
as irrevocable payment
commitments
for the first
time in 2016.
The possibility
to fulfill part of
the payment
obligations to
the deposit guarantee scheme
in the form of
payment commitments was introduced
by Directive 2014/49/EU on deposit
guarantee schemes (Article 10 (3)). The
provision on payment commitments
was transposed into German law by way
of Section 18 of the German Deposit
Guarantee Act (“Einlagensicherungsgesetz [EinSiG]” of May 2015, available on
request), allowing the usage of payment
commitments in accordance with the
requirements of the EU directive.
Further to the adoption of the German
Deposit Guarantee Act, the collection of
contributions was placed on a completely new legal basis. In January 2016,
the “Regulation on the Funding of the
Compensation Scheme of German Private Banks and the Compensation Scheme
of the Association of German Public
Banks (“Entschädigungsfinanzierungsverordnung [EntSchFinV]”, available
on request in September) entered into
force. In addition to the general rules
for the collection of contributions, the
usage of payment commitments and the
collateralization of these payment commitments are defined in detail in this regulation. In this context, EdB elaborated
a comprehensive contractual framework
which guarantees that the financial means available as payment commitments
are at the disposal of EdB and that the
collateral can, if necessary, be realized by
the deposit guarantee scheme at short
notice. The aforementioned Funding
Regulation complies with the requirements of the EBA guidelines on payment
commitments
under Directive
2014/49/EU
on deposit
guarantee
schemes (EBA/
GL/2015/09).
There are reliable indications
that the usage
of payment
commitments
will not affect banks’ net income.
The EBA guidelines contain comprehensive collateral administration requirements. In this context, EdB cooperates
with two institutions that are responsible for managing collateral. On the one
hand, the Deutsche Bundesbank acts as
collateral manager especially for those
banks that wish to use low-risk assets
(i.e. debt instruments, bonds) as collateral. Alternatively, the EIS Einlagensicherungsbank GmbH serves as collateral
manager for banks that provide cash
collateral. The contribution collection
process ends in September 2016. From
that date onwards, payment commitments will be part of the financial means
of the statutory deposit guarantee
scheme for private banks in Germany.
Dear EFDI Members,
Do you have any news or information you would like to share with
the EFDI Community?
For the next newsletter we are
looking forward to receiving your
input, e.g.
•
news about your organization
•
information about past and
future events and meetings
•
articles on topics of interest
to the community, e.g. payout cases, implementation
issues regarding the DGSDII,
etc.
Please send your contributions to:
[email protected]
until 15th October 2016.
If you have any questions concerning the newsletter or ideas
for improvement, please send
an email to the EFDI Secretariat.
We are looking forward to
hearing from you!
For further information, please feel free
to contact Dr. Hilmar Zettler (hilmar.
[email protected]).
7
Field report
THE STRUGGLE FOR THE PRESERVATION OF A TWO-TIER COMPENSATION SYSTEM IN GERMANY
Based on the Deposit Guarantee and
Investor Compensation Act (Anlege-
rentschädigungsgesetz – AnlEntG)
from 1998 in Germany are two different
compensation schemes in place for
private commercial banks and securities
trading companies.
Entschädigungseinrichtung der Wertpapierhandelsunternehmen (EdW) is the
Investor Compensation Scheme responsible for the compensation of investors
of currently 750 securities trading
companies. Entschädigungseinrichtung
deutscher Banken (EdB) is responsible
for the depositors of currently 199 private commercial banks. EdW is a Federal
Government Special Fund without legal
capacity administered by Kreditanstalt
für Wiederaufbau (KfW). EdB is the
private commercial banks statutory
compensation scheme and therefore
assigned to the Association of German
Banks (AGB).
In the year 2015 two securities trading
companies, having exhausted administrative remedies, commenced legal
proceedings at the Federal Constitutional Court (Bundesverfassungsgericht).
The two securities trading companies
complain against the separation in two
compensation schemes. They want to
end this two-tier system and obtain a
unified scheme for securities trading
companies and commercial banks alike.
As is usual the claim is not motivated by
altruistic aims but for financial reasons.
The two securities trading companies
believe their dues would be significantly
lower in a unified compensation scheme
consisting of commercial banks and
securities trading companies.
In the last 10 years the members of EdW
were required to pay contributions and
special contributions in a considerably
higher extent compared to the usual
annual contributions.
The reason behind the extraordinarily
high contributions is the up to now
biggest compensation event in the
history of EdW.
In 2004 a small aircraft crashed next to
hole Nr. 6 of the beautifully located golf
course in Zuoz, Switzerland. Pilot of the
aircraft was Mr. Breitkreuz, Founder and
CEO of Phoenix Kapitaldienst GmbH, a
securities trading company with about
30.000 customers and EUR 750 million
Assets under management. Phoenix was
specialized in options trading. Its foremost product was the so called “Phoenix
Managed Account” which came with the
promise of a constant annual return of
10 %. The “Phoenix Managed Account”
was, unfortunately for its customers
not only not a unit trust fund, but in its
entirety fictional. Most of the options
trades and the figures the customers
saw in their reports and accounts were
phonies. The bank and trading statements were forgeries. Soon after Mr.
Breitkreuz deceased the Ponzi scheme
came crashing down. On March 15, 2005
German Financial Supervisory Authority
(BaFin) ascertained the occurrence of an
event of claim. In July 2005 the insolvency proceedings were opened.
Until now EdW had to decide on some
71.500 claims for compensation for
which it committed a volume of around
EUR 261 million. EdW and the insolvency
administrator had to carry on hundreds
of lawsuits. The main question was
whether fictious profits are compensable or not. In 2010 the German Federal
Court of Justice (Bundesgerichtshof )
rejected a claim for compensation with
respect to the sham profits resulting
from the bank account statements of
Phoenix and finally settled the matter.
But back to EdW. In the year 2005 EdW
had only EUR 5 million in its purse.
Because of that EdW had to take out
a loan in an amount of EUR 128 million with the Federal Government of
Germany and since then the member
institutions of EdW have to pay back the
loan through special contributions.
In their constitutional complaint the two
claimants argue in short as follows: They
state that there is a common interest
between commercial banks and securities trading companies regarding the
stability of the financial markets and the
trust of depositors respectively investors in the functioning of the markets.
Therefore all institutions organized in
the two compensation schemes should
be evenly burdened by a compensation
event. They claim that there is a severely long-term difference concerning
the amount of contributions to the
two compensation schemes amongst
commercial banks and securities trading
companies.
The commercial banks respectively their
associations on the other hand reason in
a joint statement that the separation in
the two schemes is appropriate because
they cover completely different risk. As
the Phoenix case illustrates very well the
main risk for an investor compensation
scheme is fraud whereas the main risk
for a deposit guarantee scheme is usually the quality of it`s member banks loan
portfolios. Besides the deposits of clients
of securities trading companies which
are essential to carry out the trades are
naturally held with commercial banks
and therefore secured by their deposit
guarantee scheme.
Apart from that, we see, due to the new
DGS Directive, rising annual contributions to the statutory deposit guarantee
scheme of the AGB. Furthermore due to
the financial crisis we have seen as well
rising contributions to the additional
private guarantee scheme of the private
commercial banks (Einlagensicherungsfonds deutscher Banken – ESF) which
consists of almost all EdB member
banks.
We will see which opinion is more
convincing in the eyes of the Federal
Constitutional Court. But that`s for sure.
Even if there might have ever been a
cheaper deposit guarantee scheme for
private commercial banks in Germany
we certainly don`t have it anymore.
8
Events and Meetings
FGDR HOSTED DEPOSIT INSURERS FROM 77 JURISDICTIONS FOR AN INTERNATIONAL CONFERENCE
ON FINANCIAL STABILITY: „DIVERSITY AND HARMONISATION OF DEPOSIT INSURANCE“
The French Deposit Insurer (Fonds de
Garantie des dépôts et de résolution,
FGDR) hosted in May 2016 the 48th
Executive Council of the International
Association of Deposit Insurers (IADI),
which gathered 80 deposit insurers from
77 jurisdictions.
The closing international conference,
co-organized by the FGDR and the IADI’s
European Regional Committee, compared the harmonization of principles and
practices and the diversity of deposit
insurance models.
KEY FACTS
•
•
•
•
The exchange of views during the day
were enriched by different speaker’s
perspectives from all over the world and
coming from various horizons: Deposit
Guarantee Schemes (DGS), Regulators
and Industry.
Watch the Conference’s video on
FGDR Website.
Various EFDI members joined in Paris
their IADI colleagues, while some non
IADI and non EFDI deposit insurers came
to such an international event for the
very first time. They had the opportunity
to compare their experiences in various
1 day of talks and round tables to exchange ideas with
other deposit insurers in the
world and learn about recent
experiences in fixing crises;
4 major themes: STANDARDS,
MODELS, CRISES, CROSSING
BORDERS;
20 Speakers from 19 jurisdictions;
180 participants including
deposits insurers, central
bankers, bank supervisors,
interested academics
On the basis of the exchanges and testimonials experiences expressed during
the day, Thierry DISSAUX, Chairman of
FGDR, host of the event, unveiled what
should be the French deposit insurer
strategic position going forward, as a
“crisis operator for a sustainable finance”
FGDR CONTACT:
Sylvie DEROZIERES,
Head of Communications
[email protected]
T+33 (0)1 58 18 38 01
FGDR website :
www.garantiedesdepots.fr
fields, from the management of banking
crises linked to natural disasters or the
industrialization of depositor’s payout,
to the management of systemic crises
or the involvement of private deposit
insurers in resolution cases.
This meeting pointed out that the diversity of deposit insurance models and
the general movement of harmonizing
practices and principles do not contradict each other and, probably, add to
each other’s approaches. It therefore underlined again the need and importance
of international cooperation for deposit
insurers, and its potential implication for
depositor protection all over the world,
both on a jurisdictional basis and on a
cross border basis.
9
Events and Meetings
EFDI/EBF BRIEFING SESSION
First EFDI/EBF Briefing Session “How can a European Deposit Insurance Scheme strengthen the Banking Union?” on 14 June 2016
in Brussels
Since the publication of the proposal for
man Börsen-Zeitung, focused on some
Pearson, the head of the Commission’s
the establishment of a European Deposit of the many questions surrounding EDIS
unit for Financial Stability. Whilst Mr
Insurance Scheme (EDIS) by
Pearson could not see
the European Commission,
severe and insurmountable
the European deposit
obstacles that might affect
insurance and banking
the proposal in its essential
community has been abuzz
features as well as the schewith talks voicing high exdule for the discussions on
pectations as well as strong
EDIS, he also stated, that
reservations towards the
EDIS has to work in every
project.
country not just one.
Against this background,
EFDI and the European
Banking Federation (EBF)
organized a high-level
briefing session at the EBF
premises in Brussels. The
overriding idea of the very
first EFDI / EBF Briefing Session was to
weigh the pros and cons of the proposal presented by the Commission and
reflect on the ongoing discussions in the
European Parliament, Council and in the
EU Member States. The lively discussion
on the panel and the good level of
attendance clearly fulfilled this objective.
Overall, the event can be considered as a
very good success for EFDI and the EBF.
The program started with a short
introduction on the Banking Union in
general, presented by the EBF’s Deputy
Chief Executive, Mr Robert Priester. This
was followed by a statement by Thierry
Dissaux, Chairman of the French DGS, on
the challenges that European DGSs are
currently facing. He emphasized that European DGSs are still busy implementing
the Deposit Guarantee Scheme Directive
whilst the Commission is already one
step further.
The panel discussion, with some of the
key players in the EDIS arena and moderated by Dr. Detlef Fechner from the Ger-
that are still unanswered. There were in
depth discussions in particular on the
link of EDIS and risk reduction measures.
Why did the Commission come up with
specific rules for EDIS, but no rules for
risk reduction measures? Which preconditions do members states have to meet
before any protection by EDIS may be
triggered? Which could/would be the
ideal design for EDIS? Given the fact,
that the Commission came up with the
so-called third-pillar of Banking Union
shortly after the DGSD’s implementation
deadline, the right timing of EDIS was
also discussed vividly amongst the
panelists.
Ms Esther de Lange, the rapporteur for
EDIS in the Parliament’s ECON committee, explained her views on the Parliament’s role in the discussion on EDIS
and clearly pointed out, if EDIS is going
to work, it should be shaped in such a
way that no country feels worse of. She
concluded with the words she ”would
rather have no deal than a bad deal”.
Ms de Lange was joined by Mr Patrick
The President of the
National Association of
German Cooperative Banks
Mr Uwe Fröhlich, who
is known to be a strong
opponent of EDIS from the
start, gave a quick rundown
on his major concerns towards EDIS. He
cautioned, that EDIS would lead to more
stability only in a few countries. On the
contrary, for a significant number of
depositors EDIS would mean a reduction
to the level of protection instead of an
improvement.
Mr Daniel Gros, Director of the Centre for
European Policy Studies, completed the
panel. He has been one of the earliest
proponents of a European reinsurance
scheme, an idea that was taken up in the
Five President’s report and built into the
first phase of the Commission’s concept
for EDIS. Consequently, Mr Gros stressed
that re-insurance should not be considered as a transitory phase, but could also
provide a solution for the long run. He
also suggested using experience rating
to ensure a proper pricing of risks and
to protect the interests of depositors in
countries with a more resilient banking
system.
10
Events and Meetings
LEARNING BY DOING – COMMUNICATORS’ MEETING IN LONDON
Will Pokemon ever conquer the deposit
insurance world? Or would using such
a real time phenomenon be blasphemy
PR Com Chairman Istvan Toth
for financial guarantee organizations?
Such questions may have arisen among
the participants after the last PR Committee meeting in London. Apart from
compensation, the first speaker presents
some compensation experience. On this
day it was done by Anzhelika Esayants,
public affairs director of the Russian
Deposit Insurance Agency, who presented the main figures of the compensation cases of the last few years and the
related online communication.
Since 2005, 300 banks have gone
bankrupt in Russia, of which 44 failed
this year. Due to the high number of
bankruptcies and in order to maintain
trust in the banking system, the communication activities of DIA focus not
only on depositors to be compensated
but also on the whole Russian society.
The most important indicator reflecting
the communication activity of DIA is
the number of phone calls received and
managed in one year (2015): 300,000.
DIA began its extensive public media
activities in November 2015.
Currently they focus on 6 social media platforms, which are
dominated by ‘Vkontakte’, the
Russian equivalent of Facebook. A network of voluntary
online activists (“experts”)
assists DIA in producing its
content and in their extensive
social media activities.
On 13 June we exchanged views, argued
and taught each other about these
interesting topics. FSCS hosted the
meeting attended by colleagues from
eight countries (Albania, Czech Republic,
Germany, Hungary, Italy, Russia, Serbia
and Switzerland) and also involved
Gorkana agency, its own social media
observer as guest speaker.
Influencing for awareness
FSCS suffered from very low consumer
awareness before the crisis (while compensated 4,5 million financial customers
with GBP 26 billion since 2001), while
using content across a range of channels – said Mark Oakes Communication
Director in his presentation. The FSCS
approach defined a „Grow audience” i.e.,
25 to 34-years-old females with different
statuses (pre-family & post family), open
to financial services, messaging and
money management, intensive users of
mobile and social media.
Size and efficiency
According to the “common law” of the
committee concerning the experience in
In order to convey the FSCS messages,
co-operation was built with the major
online platforms, including Mashable
the new types of interactions behaviour
and paradigms, gamification has also
appeared on the horizon of deposit
insurance.
and Money Saving Expert, operated by
Martin Lewis, the most important British
financial educator. Owing to that promotional partnership, they managed to
attract 100,000 visitors to the FSCS page.
In the FSCS online newsletter launched
recently, 4 financial journalists were
contracted to produce the right content.
At present 300,000 subscribers read the
free household newsletter.
Effective Social Media Listening
Alistair Wheate and Hannah Evers,
experts of the FSCS agency Gorkana,
presented a shift of paradigm changing
what monitoring vs listening means in
the social media and online world. While
in the past companies put emphasis on
wanting to see what customers think/
say/love about their company and its
products, today there is a need to understand what they want/interested in and
the factors that are influencing them.
The purpose of a social media observer
is to provide support to and enable the
client not only to monitor the chats
conducted on designated social media
platforms but also to intervene and
make clarifications (quasi corrections)
when required.
“[Social Media] is data intensive, messy
and unstructured; continuous rather
than episodic; and is characterised
by increasing types of new behaviour
that must be captured, measured, and
interpreted over time”
Organic growth for reputation
building
The PR Committee occasionally discusses EFDI’s presence in the social media.
After a cost-benefit analysis EFDI found
Twitter a cost-effective tool to boost
awareness of DGS through Europe
among journalists and policy makers.
We had a look at the statistics of the
account, to see how to tailor organizational and public issue messages, promote
important news of our market as well as
(see next page)
11
Events and Meetings
what to do to create hunger for a DGS
following online stakeholder group.
advertising on YouTube, Facebook as
well as Direct mail.
Gamification on the horizon
Multiple cases, different reactions
Engaging with social media might be
a resource intensive opportunity for
organizations. In Hungary, during 2014
(6 payout cases) and 2015 (4 banks
formed banking group) depositors of
failed banks started to use Facebook to
look for more info thus they launched
user groups with local lawyers, journalists, and even politicians. Personal
involvement into the group conversation as well as handling requests of the
members required special care from
the NDIF team. The presentation also
showed a different approach of the
Investor Protection Fund of Hungary
in 2015 regarding the three failed
brokerage firms (Buda-Cash Securities,
Hungaria Securities, Quaestor group).
Investors also created 11 user groups
with thousands of members successfully
articulating their own voice in the main
media outlets.
One of the most interesting presentations was held by Renata Kadlecova (Managing Director of the Financial Market
Guarantee System of the Czech Republic). In 2014 the predecessor Deposit
Insurance Fund launched an educational
campaign in partnership with a gamification campaign called ’Strato-caching
project’ focusing on wider audience. The
cooperation resulted in 272 098 reached
users including 870 involved schools.
In 2012 the Deposit Insurance Fund
launched a campaign to increase
awareness of deposit insurance in banks,
savings banks and credit unions within
a young target group (18 – 24 years
old extended up to 34). The campaign
used Google AdWords, banner in-video
The next meeting of the PR Committee
will be held in Budapest in the autumn
of 2016. The programme already looks
promising, because discussions will be
held on the latest payout experience
from Serbia and Latvia, the cost of
communication (costs) and maybe a
Pokemon expert will also take part in the
meeting.
Member surveys:
Several new member survey results have been posted on our internal website for download.
The most recent additions include:
• Implementation of DGSD Article 11(6) – Finland
•
Transposition of the EU Directives regarding the DGSs and the recovery and resolution of credit institutions – Romania
•
Scope of coverage under DGSD - UK - FSCS
• Backup Funding for DGS – DIA Serbia
•
Publication of information on total covered deposits and own funds – EdB – Germany
• Implementation of Art 12 DGSD Lending to other DGS – Latvia
Open surveys waiting for your response include:
• Member Survey: ICS Data Structure – Litauen
• Data request on the stage and specificity of savings in EU – Romania
• Member Survey on administ
rational questions of DGSs – Romania
We wish to thank all respondents
to the surveys for their valuable
input.
12
Events and Meetings
EFDI - EU COMMITTEE MEETING, VIENNA, 23 JUNE 2016
At the kind and generous invitation of
Helmut Starnbacher, and his Austrian
colleagues, the EU Committee met in
EU Coordinator Alex Kuczynski
Vienna on 23 June 2016. Despite the
excellent weather and superb hospitality, it is fair to say that as coordinator I
also had one eye on events back in the
UK!
The Agenda represented an excellent
opportunity for members to share experiences and discuss current developments. I am particularly grateful to all
those who prepared presentations for
the meeting.
Giuseppe Boccuzzi opened the meeting
with an update on developments in Italy,
in particular around the establishment
of Atlas and the voluntary fund. This is
both fast moving and highly significant
both for Italy, and European Union member states generally. Gaining an insight
into the establishment and operation of
the resolution mechanisms now set up
in Italy stimulated an engaged discussion as well as further thoughts.
Colleagues from Germany and Hungary
shared practical experiences of recent
payout and resolution. The interventions were brought to life in the subsequent debate, providing practical know
how and policy insight into the application of the payout, and supporting
technology, and the development of a
SiFi resolution. I am grateful to Corinna
Streiter, Thörbjorn Karp, Jan Böttcher
and Peter Nagy for the contributions.
Olaf Hartenfels also looked forward to
the “EDDIES” tool for sharing SCV and
payout data in support of a cross-border
payout, to be further explored at a workshop in Cologne in early September.
Before lunch, Katerina Kioussi and
Riccardo de Lisa reflected on regulatory
implementation and developments.
In particular, Katerina covered the
temporary high balance regime under
the DGSD. It is interesting to note the
diversity of implementation across
member states. Following the successful joint EFDI/EBF event on 14 June,
Riccardo opened the floor for all to share
current observations on the proposal for
the European Deposit Insurance Scheme
and its current legislative status.
As members will know, on 21 June,
the Chairperson received a letter from
Andrea Enria, Chairman of EBA, supporting EFDI’s “H2C” initiative, following
lengthy, detailed discussions led by
Thierry Dissaux with EBA colleagues.
Thierry was pleased to present the
final draft of the home state/host state
cooperation agreement, with supporting
materials, and report EBA’s support and
encouragement for adoption of this
approach - a significant achievement for
EFDI, strongly endorsing the commitment of members to cooperation and
collaboration.
looking ahead to a general meeting
in Brussels around the end of the year,
which would mark an important milestone and step change for the Forum.
The date of the next EU Committee meeting is yet to be set, although most of us
will see each other again at the general
meeting in Vilnius in late September. As
always, if members have suggestions for
future agenda items and/or are willing
to host future meetings, please don’t be
shy!
IMPRINT
European Forum of Deposit Insurers
Association international sans but lucratif (AISBL)
Chairman DIrk Cupei
Vice Chairman Patrick Loeb
Contrôle des Contributions
EFDI account number: 0892.945.871
Registered Seat:
56, Avenue des Arts
1000 Bruxelles
From outside the EU DGSs, we welcomed presentations on investment strategy from Mirjami Kajander-Saarikoski
and James Mews on the relationship between the DGSD and third party
countries, such as Jersey. Investment
tpolicy remains under active consideration by members, many according to
differing mandates. Dealing with third
party countries is relevant for all EU DGS.
Finally, at the end of the day, Joseph
Delhaye updated us on the outstanding
issues to be resolved in the EFDI statutes,
EFDI Secretariat
German Banking Association
Burgstraße 28, 10178 Berlin, Germany
Email [email protected]
Tel 0049 30 1663 2506
EFDI Online
Twitter: @EFDI_Forum
Website: www.efdi.eu
Editorial responsibility:
Dirk Cupei
13