Status: 08/25/2021 10:37 a.m.
The savings banks and Landesbanken have apparently agreed on a reform of their bank bailout system. According to media reports, they want to save an additional 5.2 billion to secure institutions.
According to media reports, the savings banks and Landesbanken have negotiated a reform of their bank security system called for by the financial supervisory authority. The plans envisage that the public law institutes jointly save a total of 5.2 billion euros in addition to the existing funds in order to better protect each other, as the “Süddeutsche Zeitung” and the “Handelsblatt” report unanimously.
The public finance sector had been discussing the restructuring for months. Now a compromise has apparently been found: Landesbanken are to carry 2.6 billion euros, the savings banks accounted for two billion euros. In addition, there would be “promise to pay” of 600 million euros at the savings banks. On Friday, the general meeting of the savings bank umbrella association DSGV should resolve the amendment to the statutes.
“On a good way”
“We are on the right track when it comes to the key issues relating to the further development of the common security system,” the German Savings Banks and Giro Association (DSGV) told tagesschau.de. The aim is to come to a decision in the responsible bodies and to implement it. “This further strengthens the bank security of the Sparkassen-Finanzgruppe, which is advantageous for our customers.”
Eleven regional savings bank associations, the Landesbanken and the three central municipal associations, the German Association of Cities, the Association of German Cities and Towns and the Association of German Districts, are entitled to vote on Friday. A first attempt at an agreement failed at the end of June. However, no votes against are expected for Friday and the 50:50 solution. “We struggled hard,” said one person involved in the “Handelsblatt”. “We can live well with the compromise that has now been reached.”
The financial supervisory authority must also finally evaluate and approve the proposals. For some time now, the European Central Bank (ECB) and BaFin have been pushing for a reform of institutional security at savings banks and Landesbanken. Otherwise, supervisory and regulatory privileges could be lost. The complex system of mutual support is too slow and the money is not enough.
In future two separate pots
The supervisors have been critical of the system for a long time, as, for example, with the rescue of the Landesbank NordLB, which had gotten itself into difficulties with ship loans, there were repeatedly hanging games that lasted for months. Who pays how much is always part of the negotiations. At the end of 2019, Lower Saxony, Saxony-Anhalt and the savings banks finally had to spend 3.6 billion euros for the money house to survive.
The public-law security system, which is decisive for the cohesion of the institutes, has existed since the 1970s. It provides that savings banks, Landesbanken and Landesbausparkassen support each other in the event of a crisis. However, the funds deposited have so far not only been used for protection, but also for the legally required deposit protection. The ECB and BaFin also criticize this structure.
In the future there should be two separate pots. By 2024, the financial institutions should initially pay 0.8 percent of the insured deposits into the deposit protection fund, i.e. customer deposits in current, fixed-term or savings accounts up to an amount of 100,000 euros. From 2025 onwards, the new separate pot to secure the institute is to be filled.