Content Macedonia Natural... · Content 1. Current State of play 2. Depositors protection 3....
Transcript of Content Macedonia Natural... · Content 1. Current State of play 2. Depositors protection 3....
Natural obligation(beyond normative commitment)
GORAN ANCHESKI, DIRECTOR
DEPOSIT INSURANCE FUND
REPUBLIC OF MACEDONIA
DUBROVNIK, SEPTEMBER 4 TH 2015
Content
1. Current State of play
2. Depositors protection
3. Natural Obligation
4. Future challenges (DGSD and BRRD)
Key focus Depositors’ protection
Boosting confidence in financial stability
Facing and overcome complexity
Cooperation in financial safety network
Current State of play
Deposit Insurance Fund(DIF)Republic of Macedonia
Established 1997
State owned
Pay-box mandate
Ex-ante model
Unified insurance premium rate of 0.5% per annum
Current State of play
DIF’s business processes Information from
Supervision Authority (NBRM)
Calculation of insurance premium
Billing premium to DIF members
Collection of
insurance premium
Depositors list submitted by
the bankruptcy trustee
List review, inputs in
depositors data base
Controlling agent banks
Depositors' reimbursement
Analysis of target ratio
Calculation of investment
funds available
Analysis of securities portfolio
Investments in securities
Records of risk and resources
Planning and simulations
Process control and human resources
Resources management
Current State of play
Lex specialis – Law on Deposit Insurance Fund
Coverage level set to 30.000 EUR (average monthly wage set to 350 EUR)
Target ratio defined by law – 4% of the eligible deposits =total DIF funds
total household deposits=
201 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 𝐸𝑈𝑅
3,491 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 𝐸𝑈𝑅
Target ratio current value = 5,79% (June 30th, 2015)
Covered deposits ratio = 7,21% ((June 30th, 2015)
Current State of play
Eligible Deposits / Covered Deposits
200
700
1.200
1.700
2.200
2.700
3.200
3.700
31.12
.20
00
31.12
.20
01
31.12
.20
02
31.12
.20
03
31.12
.20
04
31.12
.20
05
31.12
.20
06
31.12
.20
07
30.12
.20
08
31.12
.20
09
31.12
.20
10
31.12
.20
11
31.12
.20
12
30.12
.20
13
31.12
.20
14
30.06
.20
15in
mill
ion
eu
ros
Household deposits in Macedoniayear 2000 to 2015
Only one fall due to conflict crisis in
Macedonia during 2001
Continuous increase of household deposits even during global economic
crises
Current State of play
3,491
Macedonian citizens experienced many bank failures in the past when their deposits were captured with no reimbursement (early 1990’s)
Banking system was perceived without trust till 1997
The total amount of household deposits is continuously growing since the DIF has been established, except during 2001 when the war conflict happened - exceptional factor that influenced growth of deposits
Current State of play
Period 1990-1997; Period 1997-2001;
Before the global economic and financial crises in 2007 the growth of household deposits reached its maximum so far (31%)
The total household deposits were constantly growing even during global economic crises
Current State of playPeriod 2001-2007;
Period 2007-2015
4 banks
7 saving houses
Total depositors reimbursed = 19.949
Total amount reimbursed = 22 million Euro
Reimbursement balance (1997 – 2015)
Current State of play
Depositors’ protection
Repayment period 20 days
Mandatory membership for banks and saving houses
The only deposit insurer in the country
Currently covers 14 banks and 3 saving houses
Households deposits accounts are 3.049 million
Depositors protection
0
20.000.000
40.000.000
60.000.000
80.000.000
100.000.000
120.000.000
140.000.000
160.000.000
180.000.000
200.000.000
31.12.2005 31.12.2006 31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.12.2011 31.12.2012 31.12.2013 31.12.2014 30.06.2015
in E
uro
sTotal investments of the DIF in the last decade
Greatest leap in DIF’s total investment due to a
decision made to invest 95% of total DIF funds(Decision made in December 2012)
Depositors protection
195
Boosting confidence in financial stability DIF invests in low-risk, short-term treasury bills
Current reserve fund is 200 million Euro (5,79 from total household deposits),
10 years ago it was only 5 million Euro
In case of a bank failure event, the liquidity of the DIF is immediate, provided by the Ministry of Finance (set by the Law on DIF)
Depositors protection
Natural obligation DIF is facing long-term bank bankruptcy procedures (some lasting
more than 15 years) In all cases of reimbursement, nearly 90% of depositors (in average)
have claimed their reimbursement amounts at the agent banks within a year after the bank failed
Only 11,29% of depositors have not been reimbursed yet. 95% of them hold between 1,8 to 15 Euro deposit.
Some depositors claim their reimbursement amounts long after pay-out procedure has been implemented via agent bank, all due to special cases of inheritance, years of working abroad, long-term processes spent in courts, etc.
Natural obligation, beyond commitments
In 2015, DIF initiated amendments to regulation (due to those cases) in order to strengthen depositors' protection and their trust in banking system
Statute of limitation defined to 5 years under Law on obligation The DIF undertakes responsibility to reimburse any depositor at any time after
statute of limitation is over - natural obligation The statute of limitation, as a legislative institute under the Roman law, defined
in the Macedonian law on obligations, means that when the general statute of limitation of 5 years is over, the DIF does not seize to ow the depositor its reimbursement. The only difference here is that the depositor is not allowed to submit a claim after this period (at the courts). The DIF’s obligation is transformed from legal to natural (not mandatory) obligation. It is to be effected upon a wish of the DIF
The DIF is not in any case damaged by the natural obligation. On the contrary, it when DIF settles its debts to depositors, it complies with the Law on DIF and justifies its obligations. In this manner, the major objective for which the DIF and the depositor, under law, establish a certain obligation shall be reached.
Facing and overcome complexity Bank bankruptcy procedures are implemented in compliance to
the general Law on Bankruptcy
Bank resolution is covered by Law on Banks
DIF faces inconsistencies between repayment period set by the Law on DIF and periods set in Law on Bankruptcy
It is necessary to amend the legislation and unify the periods set by law
Challenges (DGSD & BRRD)
DIF is dependable on external resources of information such as Bankruptcy Manager of a failed bank and the National Bank of the Republic of Macedonia
Supervision Authorities are more then conservative to extend cooperation
Exchange of information between commercial banks and DIF should be supported by law and other institutions such as Ministry of Finance and National Bank
Challenges (DGSD & BRRD)Cooperation in financial safety
network
DIF should serve as one of the pillars of the financial stability platform
Regular communication between National Bank, the Ministry of Finance and the member commercial banks should be imperative for building strong protection of depositors and firm verification that no system crisis could threaten the society
DIF has initiated adoption of a Rulebook on exchange of relevant information between all counterparts participating in the financial security network in order to formalize and strengthen the role of DIF
Challenges (DGSD & BRRD)Cooperation in financial safety
network
Currently DIF is used as a “pay-box” only after the Governor proclaims failure of a bank,
If certain regulation are changed it could become the most powerful tool to prevent bank failures by using the available financial means
The relationship between DIF and Resolution Authorities should be close and at the highest possible level
Building of Institutional capacities takes time
Challenges (DGSD & BRRD)
New obligation
Thank you!
Goran Ancheski, MBA
Director
Deposit Insurance Fund
Republic of Macedonia
E-mail: [email protected]
Cell: +389 70 328 811
Office: +389 2 32 35 735