The fund will operate alongside the new bridge bank, and may even contribute to its capitalization.
The new structure is actually the special fund for compensating people affected by the special administration of a bank regulated last year. The redefining comes after another new entity, the so-called bridge bank, which will be able to take over the management of ailing banks, has been regulated, as well.
The authorities are thus trying to build the necessary mechanism that will enable them to take control of a bank in trouble, which its parent bank can no longer keep going.
The restructuring fund should be fuelled by annual contributions made by banks up to 0.1% of their non-secured liabilities and will be managed by the Deposit Guarantee Fund. The European Central Bank, which reviewed the draft law notes, however, that it lacks details about how the restructuring fund will finance the measures taken to stabilize a bank. It also believes that the roles of the restructuring fund and of the guarantee fund need to be clearly defined, and recommends that the capitalization of the bridge bank should fall upon the restructuring not the guarantee fund. Moreover, ECB believes that the Bank Restructuring Fund should become a shareholder and manager of the ailing bank or of the bridge bank.
BNR provided for a two-year life span of the bridge bank, but ECB thinks BNR should be allowed to extend it in compliance with clearly defined criteria, such as a continued risk for the financial stability or the impossibility of finalizing talks with a private buyer.
(English version by Loredana Fratila-Cristescu)