For banks

Credit institutions and investment firms defined under Commission Delegated Regulation (EU) 2015/63 of 21st October 2014 (the “Regular Contribution Regulation”) are obliged to contribute to the Crisis Resolution Fund. A link to the text of this regulation can be found on the page Legislation in the section Guarantee System.

The Czech National Bank publishes by official communication the annual target level of contributions to the Crisis Resolution Fund.

Methodological guidelines on the determination of the contribution to the Crisis Resolution Fund from 1st January 2016 can be found here.

The contributions to the Crisis Resolution Fund have to be paid in Czech crowns to the account of the Guarantee System held at the Czech National Bank No 10006-706011/0710.

For regular contributions the following rules will apply

After consultation with the Guarantee System, once a year the Czech National Bank sets by official communication the annual target level for contributions to the Crisis Resolution Fund (the “annual target level”) under Article 3 point 3 of the Regular Contribution Regulation so that the deadline defined in Section 213(2) of Act No 374/2015 Coll. is fulfilled, i.e. so that the target level of the Crisis Resolution Fund is fulfilled by 31st December 2024. While defining the annual target level, the Czech National Bank considers the requirement of an even distribution of the contribution amount during the whole period and simultaneously it properly considers the phase of the economic cycle and any eventual pro-cyclical impact of regular contributions on the financial situation of the contributors.

The regular contribution of an institution under Article 3 point 1 of the Regular Contribution Regulation (an “institution with standard contribution regime”) is set by the Czech National Bank as an annual contribution under Article 3 point 5 of the Regular Contribution Regulation. The share of the basic annual contribution of an institution with standard contribution regime in relation to the annual target level is defined as the ratio of the total liabilities of the institution less own funds and covered deposits to the total liabilities of all institutions and branches of institutions from non-EU Member States less own funds and covered deposits, unless the Regular Contribution Regulation defines otherwise. Details and the method for the calculation of liabilities and risk adjustment for the basic annual contribution are defined by the Regular Contribution Regulation.

Regular contributions of institutions with standard contribution regime that fulfil the condition under Article 20 point 5 of the Regular Contribution Regulation (i.e. institutions whose total liabilities, less their own funds and covered deposits, are above EUR 300,000,000, and whose total assets are equal to or less than EUR 3,000,000,000) will be defined according to Article 20 point 5 of the Regular Contribution Regulation.

For defining regular contributions of institutions other than institutions with standard contribution regime and branches of institutions from non-EU Member States (“institutions with special contribution regime”) similar above mentioned rule is used, i.e. share of basic annual contribution of the institution on annual target level is defined as the ratio of the total liabilities of the institution less own funds and covered deposits to the total liabilities of all institutions and branches of institutions from non-EU Member States less own funds and covered deposits, unless the Regular Contribution Regulation defines otherwise.

If the Czech National Bank so enables, with the consent of the Guarantee System, by decision under Article 13 point 3 of the Regular Contribution Regulation, payment of part of the regular contribution through an irrevocable payment commitment, it also defines the details for its payment and mainly the conditions for its riskiness, liquidity and diversification of guarantee provided so that the payment commitment is secured only by a low-risk asset non-encumbered by third party rights. The payment commitment can be offered and received only under the conditions defined in the decision of the Czech National Bank. Simultaneously, the Crisis Resolution Fund must be able to manipulate freely with it and it must be earmarked for exclusive use by the Crisis Resolution Fund for the purposes defined by Article 212(1) of Act No 374/2015 Coll. and for other purposes of use of Crisis Resolution Fund assets. The share of irrevocable payment commitments in the contribution fund of the Crisis Resolution Fund assets cannot exceed 30%.

It is not possible to pay regular contributions in the form of irrevocable payment commitments if the amount of the regular contribution of an institution or branch of an institution from a non-EU Member State does not exceed EUR 50,000.

For extraordinary contributions the following general rules apply

If the financial resources in the Crisis Resolution Fund are not sufficient for its legally defined purposes, the Czech National Bank will decide to collect extraordinary contributions.

An extraordinary contribution cannot be paid in form of irrevocable payment commitments.

The total amount of extraordinary contributions and their maturity dates will be decided by the Czech National Bank after consultation with the Guarantee System. The whole amount of extraordinary contributions must be equal to the difference between the assumed cost of financial crisis resolution and the Crisis Resolution Fund assets. At the same time, the amount of extraordinary contributions cannot exceed three times the amount of the annual target level. The Czech National Bank will notify the total amount of extraordinary contributions to the Guarantee System.

For defining the share of an institution or branch of an institution from a non-EU Member State in the total amount of extraordinary contributions, similar methods to the calculation of regular contributions will be used.

If the obligation to pay extraordinary contributions threatens the liquidity or the capital requirements of an institution or a branch of an institution from a non-EU Member State, on request from such institution the Czech National Bank can temporarily reduce the amount of the extraordinary contribution or temporarily suspend its obligation to pay the extraordinary contribution for a maximum period of 6 months. This period can be extended on request of the institution or branch of an institution from a non-EU Member State. The part of an extraordinary contribution that has not been paid in full or within the deadline due to such reduction or suspension becomes due on the last day of the defined period.