The Board of Directors of the Resolution Fund held its inaugural meeting pursuant to the act on the further development of the institutional framework strengthening the security of certain actors of the financial intermediary system (Act XXXVII of 2014). The Fund, which will be funded by contributions from credit institutions and investment firms, will enable that the settlement of the situation of troubled institutions is financed by sector participants instead of taxpayers.

The management board of the Resolution Fund has four members: one was appointed by the Minister for National Economy, two members by the head of the National Bank of Hungary, and the fourth member is managing director of the National Deposit Insurance Fund of Hungary (OBA).

Pursuant to the Act, all credit institutions and investment firms having a head office in Hungary are obliged to join the Fund. The operational work of the Resolution Fund commences with the submitting of accession statements until the 21th August 2014 by the institutions authorized (or which applied for authorization) before 21th of July 2014.

After that, the institutions are obliged to transfer to the account of the Resolution Fund as first part of the accession fee an amount corresponding to 0.01 % of their share capital until the 4th of September, the second part is due by the 20th October 2014 in an amount of 0.04% of the share capital. The institutions applying for authorization after 21th of July 2014 shall transfer the full amount of the accession fee (0.05%) within thirty days from the date of their authorization.

The Act formulated in accordance with the EU principles came into force on the 21st July 2014. The Resolution Fund established on the basis of the Act contributes significantly to the secure and reliable operation of the financial intermediary system and furthermore to the enhancement of stability. According to the basic principle of the Act, the critical functions of troubled institutions shall always be maintained, so that a resolution process could be the preferred alternative against an insolvency procedure. Another basic principle of the Act is that small depositors must not suffer any loss, thus the deposit insurance framework shall continue to provide full protection for the deposits under one hundred thousand euros.

Until the establishment of the independent website of the Resolution Fund, further information on the Fund is available on the websites of the Ministry for National Economy,  the National Bank of Hungary and the National Deposit Insurance Fund of Hungary.

The samples of the accession statement (in Hungarian) can be downloaded from this link:

http://www.kormany.hu/hu/nemzetgazdasagi-miniszterium/hirek/a-szanalasi-alap-megkezdte-mukodeset

(Ministry for National Economy)