The Deposit Insurance Fund Will Take Care of the Clients of Foreign Banks
Prague, 16 March 2011 – Clients of foreign banks can again rest a little more easily. The Czech Republic joined another 15 European signatories in signing the international Memorandum of Understanding on cross-border cooperation between deposit insurance schemes. In the event of the bankruptcy of a bank, clients will no longer have to travel abroad to obtain their compensation.
The Deposit Insurance Fund ratified the Memorandum of Understanding concerning cooperation among deposit insurance schemes in the EU, which concerns, above all, the method of communication among deposit insurance schemes and between the deposit insurance scheme in the “host” country and the clients of the branches of foreign banks, in the event of the bankruptcy of such a bank, and the method of paying out deposit compensation.
“The fundamental thing for clients is that in the event of the bankruptcy of the domestic branch of a foreign bank, they will not have to travel to the country where the parent company is based in order to get their deposit compensation. The Deposit Insurance Fund will be the only contact point in the Czech Republic, and upon agreement with the local deposit insurance scheme, it can also ensure the payment of deposit compensation,” says Renáta Kadlecová, Managing Director of the Deposit Insurance Fund.
Examples of retail banks operating in the Czech Republic as branches of foreign banks to whose deposit products deposit insurance applies are AXA Bank (Belgium), mBank (Poland), Citibank (Ireland), ING Bank (Netherlands), and Oberbank (Austria).
“Thus far, we have addressed issues concerning client payout by means of bilateral agreements with national deposit insurers in specific countries. A multilateral cooperation agreement on an international level significantly strengthens the level of communication and exchange of experience among national schemes and, above all, sets the rules for proceeding in the event that a deposit payout must be launched,” adds Renáta Kadlecová.
To date, 15 European deposit insurance schemes have joined the Memorandum, including, for example, Poland, Netherlands, Ireland, United Kingdom, Italy, and Denmark; nevertheless, in the near future, the remaining countries of the EU 27 should also join the Memorandum.
Currently, the Deposit Insurance Fund also has a framework cooperation agreement concluded that addresses these issues with Hungary and Slovakia, and a cooperation agreement concluded with the United Kingdom.
For a complete version of the Memorandum of Understanding and the list of the signatories, see:
http://www.efdi.net/documents.asp?Id=11&Cat=Efdi
Publikováno: 15.3.2011
