History of the Fund
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ESTABLISHMENT
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Banks and other deposit taking credit institutions are not immune from the risk of bankruptcy and therefor deposit insurance is part of the banking system in market economies. The failure of specific financial institutions may have a serious impact on the national economy; thus, it is in the interest of every country to ensure the stability of its banking system and maintain people's trust in credit institutions through deposit insurance.
In Hungary, Act XXIV of 1993 on the establishment and operating regulations of the National Deposit Insurance Fund of Hungary was passed by Parliament on March 31, 1993. At the same time the fund was registered as a legal entity and started operation on July 1, 1993.
The principles of the Deposit Insurance Act have been laid down in accordance with the relevant guidelines of the European Union. Consultants from the Canada Deposit Insurance Corporation (CDIC) made also a major contribution to setting the legal and practical grounds for the fund.
On January 1, 1997, Act CXII of 1996 on credit institutions and financial enterprises (Banking Act) took effect, which incorporates the regulations on deposit insurance that had earlier been included in a separate law. Simultaneously, Act XXIV of 1993 was repealed.
