Public funding of failing banks in the European Union (LBF vol. 19) 2020/4.4.2.5:4.4.2.5 To protect client funds and client assets

Public funding of failing banks in the European Union (LBF vol. 19) 2020/4.4.2.5

4.4.2.5 To protect client funds and client assets

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

The fifth resolution objective is to protect client funds and client assets. Taking into account that the protection of depositors and investors covered by a deposit guarantee scheme and investor compensation scheme, respectively, already is a separate resolution objective, it is the author’s understanding that this objective entails the protection of other client funds and client assets. One could, for example, think of deposits or securities of clients that exceed the coverage maximum of a deposit guarantee scheme or of an investor compensation scheme, respectively.

In the cases of the Bank of Peloponnese and Panellinia Bank it was specifically considered that the application of resolution measures would safeguard public confidence, especially with regard to depositors, in the domestic financial system, considering that the mere withdrawal of the authorisation of the banks without the implementation of resolution measures would have a significant destabilising impact on the financial system. In particular, the withdrawal of the license of both banks would result in losses on the non-covered part of deposits. In relation to the Bank of Peloponesse it was estimated that, under the current adverse circumstances, these losses would cause negative reactions on the part of depositors of the other banks.1

Deze functie is alleen te gebruiken als je bent ingelogd.