BERLIN (Dow Jones) – The Cabinet on Wednesday approved the bill on the reorganization and restructuring of banks. The federal government wants to bring the restructuring law, which also includes the bank levy, now in an abbreviated procedure to the end of this year by Parliament. (Photo : Anders)
Scheduled in the law is facilitating rehabilitation of institutions and a reorganization by separating components in a systemically important bank insolvenzähnlichen procedures.
The Union ‘s financial spokesman Leo Dautzenberg welcomed the decision of the Cabinet, the Green Party financial expert Gerhard Schick went the other hand, he does not go far enough. "The restructuring law sets a milestone for a firm regulatory framework of financial markets , "said Dautzenberg . Banks would continue a liquidation or restructuring can not be fed . With the introduction of the bank charge should be prepared in the future in the financial market crisis. " On the taxpayer may no longer be used as the first in a crisis , "he said.
Schick said , however , the bill still not convinced . " In the parliamentary procedure must be improved thoroughly , "he demanded . With the current state law could banks " continue to trust , to be saved in any doubt, billions of taxpayers . " It lacks a mechanism that automatically banks in difficulties and doubts against the will and the expense of shareholders and creditors to secure liquidity and capital . The Bank , criticized Send levy as " insufficient and unfair " .
The law provides for a two-step procedure, which will be launched at the initiative of the bank itself. On the first level is a reorganization proceedings should be handled with the imbalances through early intervention at the level of management. In addition to the competent court " a wide range of policy options are open ".
The standing on the second level reorganization procedure follows in principle to the well known insolvency proceedings , but it contains according to the Federal Ministry of Finance ( BMF ), some special features : How will the implementation of a successful reorganization plan to stock a hazard of systemic bank be facilitated by the option is introduced to overrule the shareholders, if they resist such.
The recovery procedure is to all in need of refurbishment credit available to find the second stage but only apply to systemically important banks. In order to ensure rapid action should be in the Banking Act established a sovereign intervention practices by the supervisory authority. This procedure is designed to systemically outsource operations of a bank and transfer it to a private buyer and a " bridge bank ", a government vehicle in the event that no private to assume is ready. The decision on whether a bank in difficulty " systemic "is intended to meet the banking supervision.
The proposed bank tax, the restructuring fund is financed , will be charged with progressive rates , and also may provide for a fixed rate for off-balance sheet derivatives. The amount of annual contributions has to be " guided by the business volume, the size and networking of the Institute’s contributions in the financial market . " The annual fee , which the Institute by 30 September must make is to the BMF can set by decree . The anticipated income of the Fund is, according to the BMF "no target " , as measured by the bank profits in 2006 but it would be 1.3 billion EUR.
To pay a full annual subscription to all banks be required to be supervised in accordance with the provisions of the Banking Act , including savings banks, cooperative banks, development banks and mortgage banks , not insurance companies. Exceptions should not be. Tax base should be the sum of liabilities minus the liable equity capital and debt to customers. Then will apply progressive tax rates : up to EUR 10 billion a rate of 0.02 %, between EUR 10 billion and 100 billion EUR of 0.03 % and over 100 billion EUR of 0.04 %.
A second component is to contribute to park off-balance sheet derivatives as an additional measure of connectedness . The off-balance sheet derivatives volume is to be charged with 0.00015% . It is planned but a reasonableness limit of 15 % of annual profits. The minimum contribution is 5 % of the regular annual fee.
Annual contributions to the restructuring fund will deviate from the principle of the deduction of business expenses within the meaning of "objective net principle "may not be tax deductible as business expenses . In retrospect, possible special contributions to replenish the fund after a loss but should be deductible because they are given priority financing function.
to be Managed Fund of the proposed restructuring of the Federal Agency for Financial Market Stabilization ( FMSA ). The actions of the Stabilization Fund (SoFFin ) should therefore expire at the end , then , no new funds can be more sought. As an exception provides that, when the existing settlement commitment to WestLB and Hypo Real Estate ( HRE) and after that a " top up capital "is possible. In addition to a future conversion silent partnerships are made possible in stocks.
The BMF is also planning to extend the date five-year limitation period for the stock corporation law liability of the institutions listed companies for breaches of duty with the Board ( paragraph 93 Companies Act ) to ten years. This will enable the enforcement of compensation claims , even when its existence is known or their late claim de facto only be possible if the composition of the human society institutions has changed.
– By Andreas Kissler , Dow Jones Newswires
+49 (0)30 2888 4118, andreas.kissler @ dowjones.com
DJG / ank / mle / sc