Following a recent onsite inspection held jointly by the Malta Financial Services Authority and the European Central Bank in April 2016, a number of serious regulatory shortcomings were identified in the Bank’s operations.
These regulatory findings have been communicated to the Bank, together with a directive that restricts the Bank from opening any new accounts or from accepting new client deposits into accounts. Withdrawals by existing clients are being limited to EUR250 per day for each client until further notice.
The regulator has appointed PricewaterhouseCoopers Malta as a competent person to: [i] take charge of the assets of the Bank for the purpose of safeguarding the interests of depositors and its other clients; and [ii] to assume control of the Bank’s business and to carry on that busin...
Employees of FBME Bank in Cyprus are on strike since the administrator fired the majority of the employees. Employees want the administrator to honor the contractual obligations the bank has towards them. To make sure their demands are met, the administrator and the central bank are excluded from access to the administration of FBME. This exactly describes the current problem. If the administrator does not have access to the files, he cannot make a payout to the depositors under the DGS agreement. To be continued.
To create as much security as possible for depositors of banks in the European Union, the European Commission crafted a directive for bank failures.
Since its inception many banks in the European Union have successfully used the DGS directive and their domestic deposit protection scheme to secure and pay out the insured deposits. Currently there are banks in Latvia, Cyprus and Malta that are in difficulties. For customers of FBME Bank in Cyprus the DGS was activated the 18th of April 2016 and FBME Cyprus customers receive up to 100.000 Euro from the deposit guarantee scheme.
The DGS is an external insurance. Participating banks pay a premium based on the deposits the hold on behalf of their customers and a risk based pricing model. High risk banks have a different business model or a small numbe...