The resolution fund was established on 10 January 2018 pursuant to Law 133/2016 "On the recovery and resolution in banks, in the Republic of Albania". The bank resolution fund pools together regular (annual) contributions from banks, whose level is set by the Bank of Albania so that the target level of 0.5% of the all banks ’liabilities might be reached by 11 July 2027.
In ten years (2017-2027), this will be achieved by collecting contributions from banks in banking sector.
The Bank of Albania calculates annually the contribution paid by the banking sector for gradual build-up of the Resolution Fund.
The calculation shall be made according to the formula set out in the Regulation of the Fund.
Establishment of the "Resolution Fund"
- For the first year, the target level, the annual level of the Fund and the annual contribution for each bank is based on the financial statements of 2016.
- By 10 January 2018, banks shall pay 10% of the annual contribution to the Fund.
- By 30 April 2018, banks shall pay the remaining 90% of the contribution for the first year.
- The fund’s targeted level calculated based on the audited balance sheet data of the banking sector as at December 2016 is ALL 6,324,246,425.44.
- The Fund’s annual level for the first year is ALL 632,424,642.54 and is distributed in relation to the share that each bank has in the liabilities of the banking sector.
The use of the resources of the bank resolution fund is decided by the Bank of Albania, as the resolution authority, to cover the needs related to the effective application of the resolution tools, for the following purposes:
- to guarantee the assets or the liabilities of the bank under resolution, its subsidiaries, a bridge bank or an asset management vehicle;
- to provide with liquidity the bank under resolution, its subsidiaries, the bridge bank or the asset management company;
- to purchase assets of the bank under resolution;
- to contribute in capital and ensure other necessary funds to a bridge bank or an asset management company;
- to pay compensation to shareholders or creditors in accordance with Article 58 of Law no.133/2016;
- to compensate the bank under resolution the uncovered loss arising due to the exclusion of eligible liabilities of certain creditors arising from the application of the bail-in tool in accordance with paragraph 1 of Article 31 of Law no.133/2016;
- to take any action by combining the possible actions provided in letters "a" to "f" herein;
- to pay reasonable costs incurred by the Resolution Authority in relation to the application of the resolution tools or powers if not compensated in accordance with paragraph 4 of Article 25 of Law no.133/2016;
- to cover the costs for administration of the "Resolution Fund";
- to repay obligations and loans obtained pursuant to Article 72 of Law no.133/2016;
- for every payment for damage compensation pursuant to a final administrative or court decision, in accordance with the provisions of this Law