Category: News

On the Fund’s website, in the section “Resolution – MREL Methodology”, the Fund’s approach to the  calculation and maintenance of the MREL requirement (MREL Methodology) has been published.

We kindly invite you to read!

MREL Methodology

President of the BFG Management Board became the member of the Strategic Planning Working Group (SPWG) of the International Association of Deposit Insurers (IADI). The group is responsible for developing solutions that will enable the reform of the association. Continue reading “BFG President in the IADI Strategic Planning Working Group”

On 9 October 2016 entered into force the Act on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution (the Act on BFG).

Under the new Act on BFG the Fund has gained new powers enabling to carry out a resolution action. The Fund may start the resolution process, if any opportunities to recover a bank, credit union or investment firm by early intervention measures undertaken by the PFSA are exhausted, and the resolution action is necessary in the public interest.

As part of resolution BFG will be able to:

• sell a failing institution, in whole or in part,
• establish a bridge institution – a special entity to which good assets and liabilities (deposits) of an institution at risk will be transferred,
• write down certain obligations of a threatened institution in order to cover its losses or convert them into shares, so as to restore its capital base and allow continuity of its operations (i.e. bail-in)
• transfer doubtful assets to an entity specialized in the management of such assets.

The new Act has slightly changed existing rules deposit guarantees.

The deadline for the disbursement of the guaranteed funds by the BGF has been shortened from 20 to 7 working days.

The guaranteed amount remained unchanged at the PLN equivalent of EUR 100 thousand. In certain special cases, the guarantee limit may be higher.

This applies in particular to the situation when the funds in the account came from: the sale of a house or apartment unrelated to the business activity, acquisition of inheritance, the payment of the sum insured under life insurance agreement further to the death of the insured person or reaching the specific age by that person, the payment of accident insurance, the payment of severance payment, the retirement or disability severance payment or performance of distribution of property following the expiry of matrimonial property.

Regardless of the above situations, the limit is increased by the granted compensation and by some damages – in its entirety.

During the period of 2014-2017, the Bank Guarantee Fund (BFG) paid out PLN 4.326 bln of guaranteed funds to depositors of 11 failed credit unions and PLN 2.174 bln to depositors of two failed cooperative banks.

Total guarantee liabilities in both  cases (including amounts not yet collected by depositors) amounted to PLN 6.549 bln.

The BFG is entitled to obtain various sources of financing, including its own funds as well as  financial resources  accumulated by all banks  as the guaranteed deposit protection funds.At the end of 2017, the amount of funds that could be utilized for guaranteed funds payments amounted to:

• guarantee funds of banks and credit unions – PLN 10.756 bln,
• statutory fund less value of tangible and intangible assets – PLN 1.583 bln ,
• guaranteed deposit protection fund (hereinafter referred to as FOŚG) – PLN 6.285 bln.

FOŚG is a fund maintained by banks, that can be used in the event of own funds depletion for the payment of guaranteed funds to bank depositors.

The above-mentioned numbers amount to PLN 18.624 bln in total.

Additonally, at the end of 2017, the BFG had PLN 3.575 bln in the resolution fund of banks and credit unions.

It should be mentioned that for the purpose of paying out guaranteed funds the Act on the Bank Guarantee Fund provides  the possibility of obtaining loans or subsidies from the State Budget as well as a short-term loan from the National Bank of Poland.