Testing of five banks has shown that we are quite capable to intervene in order to safeguard the financial stability of the banking system. This means that in a short term, guaranteed deposits would be paid in the event that some of the banks went into bankruptcy or liquidation, says the executive director of the Deposit Protection Fund, Predrag Markovic.
The testing carried out in November and December on a voluntary basis, after a consultation with the Association of Banks, covered Erste Bank, NLB Bank, Addiko Bank, Atlas Bank and Hipotekarna Bank.
In case a bank goes bankrupt, the Fund would pay out a guaranteed deposit of up to €50,000 per depositor and bank.
“The test results showed that banks have good records of depositors, deposits and obligations and that it is possible to easily obtain them in case of a “protected event” in order to determine the height of the guaranteed deposits. Also, the banks have the capacity to take over the “bank payer” role and to begin payment of guaranteed deposits in the short term. Employees of the Fund are able to quickly and efficiently calculate the guaranteed deposit using corresponding software,” Markovic explained.
He said that he could not disclose the amount of the total deposits in the five banks, because it is not in accordance with the data protection principles. However, it is certain that the Fund would be able to pay the guaranteed deposits in four of the five tested banks with the money it has now.
“For one of these banks additional funding would be needed. It would be provided in one of the legally prescribed ways – collecting an extraordinary premium, borrowing from the Budget of Montenegro, taking loans from foreign banks and financial institutions, issuing securities,” Markovic explained.
However he said that significant problems with banks were not expected in the future.
