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Full-Text Articles in Economic Policy
Portugal: Deposit Guarantee Fund, Kaleb B. Nygaard
Portugal: Deposit Guarantee Fund, Kaleb B. Nygaard
Journal of Financial Crises
On November 3, 2008, the Portuguese government, through a formal legal decree, increased the country’s deposit insurance coverage from EUR 25,000 to EUR 100,000 (USD 31,750 to USD 127,000). The decree came in response to the Global Financial Crisis and a European Union recommendation that all member states increase their deposit coverage to at least EUR 50,000. Portugal’s deposit-guarantee fund, the Fundo de Garantia de Depósitos (or FGD in Portuguese), had existed since 1992. In 2010, the fund was called upon to cover approximately EUR 100 million in deposits of the failed commercial bank Banco Privado Português, S.A., which had …
European Banking Union D: Cross-Border Resolution—Dexia Group, Rosalind Z. Wiggins, Natalia Tente, Andrew Metrick
European Banking Union D: Cross-Border Resolution—Dexia Group, Rosalind Z. Wiggins, Natalia Tente, Andrew Metrick
Journal of Financial Crises
In September 2008, Dexia Group, SA, the world’s largest provider of public finance, experienced a sudden liquidity crisis. In response, the governments of Belgium, France, and Luxembourg provided the company a capital infusion and credit support. In February 2010, the company adopted a European Union (EU)-approved restructuring plan that required it to scale back its businesses and cease proprietary trading. In June 2011, Dexia withdrew from the government-sponsored credit support program before its expiration date, and in July, the company announced that it had passed an EU stress test. However, just three months later, Dexia wrote down its substantial position …
European Banking Union B: The Single Resolution Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick
European Banking Union B: The Single Resolution Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick
Journal of Financial Crises
The options available to European governments to respond to a multinational bank in financial trouble have been severely limited since each country has its own unique laws and authority applicable to banks operating within its borders. The Bank Recovery & Resolution Directive (BRRD), which was adopted in 2013 and scheduled to go into effect January 2015, harmonizes rules across EU countries for how to restructure and resolve failing banks. However, the directive would maintain the existing system of individual national resolution authorities and resolution funds. To better secure the Eurozone banks and to compliment the Single Supervisory Mechanism, which was …