The Fund for Extraordinary Intervention in banks reaches 55 million euros

2024-05-09 20:30:00, Ekonomi CNA

Commercial banks have fully repaid the sixth year's contribution to the Emergency Intervention Fund. In April of this year, the fund was increased by ALL 982 million from the collection of the banks' annual contribution.

The value of the contribution of the banking sector has increased by 9.5% compared to the previous year, as a result of the increase in the value of liabilities, mainly deposits, in the balance sheet of the banking sector last year.

In total, after pouring the annual contribution of the banks for five years since its establishment, the Emergency Intervention Fund is estimated to have reached the value of 5.5 billion ALL or about 55 million euros.

The Emergency Intervention Fund was created in 2018 and aims to save banks that may be in trouble in the future from bankruptcy, without the need to request a contribution from taxpayers' money.

Pursuant to the law "On recovery and extraordinary intervention in banks, in the Republic of Albania", the fund must reach the target level of 0.5% of the total liabilities of the banking system, calculated as the difference between the total assets and the regulatory capital of to all licensed banks in the Republic of Albania, within 10 years from the entry into force of the law.

Based on the current value of liabilities, the projection is that by July 2027, the Fund for Extraordinary Intervention in Banks will reach the value of 8.5 billion ALL.

The Fund for Extraordinary Intervention in banks reaches 55 million euros

The main source of funding for the fund is the regular annual contributions paid by the banks, in order to meet the target level of the fund, as well as the income from the investment of these contributions.

The law reflects the new framework of the European Union aimed at saving banks, which was built after the financial crisis that started in 2008.

The Extraordinary Intervention Fund is administered by the Deposit Insurance Agency, in accordance with the fund's financial assets management policy, which is approved by the Bank of Albania.

This fund can be used by the Bank of Albania for several purposes, such as guaranteeing the bank's assets or liabilities in extraordinary interventions, the bridge bank or the asset management company; meeting the need for liquidity of the bank in the extraordinary intervention procedure, bridge bank or asset management company; the purchase of the bank's assets in the extraordinary intervention procedure, to contribute to the capital and to provide other necessary funds for the bridge bank or the asset management company; compensation for uncovered losses that arise due to the exclusion of accepted obligations of the bank's creditors in extraordinary interventions; covering expenses for the administration of the Extraordinary Intervention Fund, etc./ Monitor.al