20 November, 2013
In order to have single rules for handling potential cross border bank failures and reimbursing depositors, Deposit Protection Fund of Slovakia and the National Deposit Insurance Fund of Hungary today signed a mutual claims handling bilateral agreement. Aim of the cooperation that contains harmonization of technical details during an eventual payout is to serve mutual interest of the two countries in maintainaining financial stability and enhancement of public confidence in the financial system in line with objectives of EU Directive on Deposit Guarantee Systems.
Having deep understanding on the diverse national legal environments and also with regard to creating mutual institutional ability that grounds fast and effective depositor reimbursement in a cross border case, today Deposit Protection Fund of Slovakia (DPF) and the National Deposit Insurance Fund of Hungary (NDIF) has signed a bilateral frame agreement on mutual claims handling.
In the agreement, the two schemes recognize the prospect of cross-border claims management and agree to collaborate with each other to ensure that depositors receive compensation payments promptly in compliance with the relevant regulatory time frame (within 20 working days) and within the maximum compensation limit (EUR 100.000 per capita per institution), set forth by the EU Directive (94/19/EC) of 30 May 1994 on Deposit Guarantee Schemes.
„One of the main characteristics of the European banking market and what differentiates it from other markets is the occurrence of the cross border financial services and its relation with deposit insurance that provides actual challenges for the financial safety net players. Beyond the EU Directive on deposit-guarantee schemes we need to go much further and deeper in bilateral cooperation harmonizing our level playing field through services to be effective under different language, legal and also technical requirements”, said Andras Fekete-Gyor, Managing Director of NDIF.
„DPF of Slovakia is one of the first deposit insurance schemes in Europe that experienced complexity of a cross border payout. Even the small case of Unibon, savings and credit cooperative company from the Czech Republic, back in 2012, provided us with valuable lessons. Sharing information between the parties in that time, pre-arrangement of technical details such as methods of the payout and also laying down the steps of the procedure were all crucial elements to fulfill the task of reimbursement in a cross border case”, said Rudolf Sujan, Chairman of Presidium of the PDF.