Bank Resolution Fund
A special fund for bank resolution was established by the Bank of Slovenia at end of March 2015, under the Bank Resolution Authority and Fund Act (Official Gazette of the Republic of Slovenia, Nos. 97/14, 91/15, 44/16 - ZRPPB and 27/17). The fund is being financed by contributions from banks and savings banks established in Slovenia. The fund is designed for financing the compulsory wind-up measures that can be imposed by the Bank of Slovenia. According to the law, the fund will cease its operations on 31 December 2024.
Size of the bank resolution fund
The target level for the fund, comprising bank assets that are managed separately from other assets by the Bank of Slovenia, is 2.3% of the total deposits covered by guarantee at all banks in Slovenia (as at 30 September 2014).
Of this, the banks provided founding assets in the amount of 1.3% of total deposits covered by guarantee by paying in their founding contributions. At the same time the banks must be able at any time to provide cash to the fund in the amount of 1% of total deposits covered by guarantee, for which reason they are required to hold liquid assets in the form and in the manner set out by the Regulation on liquid investments for the purpose of the resolution fund (Official Gazette of the Republic of Slovenia, No. 6/15; corresponding SRB form).
Purpose of the fund
The fund’s assets can be used for financing the implementation of compulsory wind-up measures imposed by the Bank of Slovenia. They may be used for:
- the pay-in of the initial capital of a special-purpose entity established in accordance with the law governing the resolution and compulsory winding-up of banks, to which the bank’s assets, rights and obligations are transferred in compulsory wind-up proceedings
- the payment of consideration to the bank when the fund, as the acquirer, is taking over the assets, rights and obligations of a bank undergoing compulsory wind-up proceedings
- loans, guarantees, sureties or other collateral provided in connection with compulsory wind-up measures
Fund’s investment policy
In accordance with the ZOSRB, the investment policy for the management of the fund’s assets is set out by the Bank of Slovenia to ensure the security, low risk and high liquidity of the bank resolution fund’s assets. The Governing Board of the Bank of Slovenia set out the bank resolution fund’s investment policy and the package of management fees to be covered in accordance with the ZOSRB by the Bank of Slovenia and charged against the fund’s assets via the Regulation on the investment policy and management fees of the bank resolution fund.