S.L. 371.9 Art. 34Borrowing between deposit guarantee schemes.

(1) The Scheme may, in consultation with the competent authority, lend to other DGSs within the European Union on a voluntary basis, provided that it ensures that the following conditions are met:

(a) the borrowing DGS is not able to fulfil its obligations under Article 9(1) of the Directive because of a lack of available financial means;

(b) the borrowing DGS has made recourse to extraordinary contributions referred in Article 10(8) of the Directive;

(c) the borrowing DGS undertakes the legal commitment that the borrowed funds will be used in order to pay claims under Article 12 of the Directive;

(d) the borrowing DGS is not currently subject to an obligation to repay a loan to other DGSs under this regulation;

(e) the borrowing DGS states the amount of money requested;

(f) the total amount lent does not exceed 0.5% of covered deposits of the borrowing DGS;

(g) the borrowing DGS informs the European Banking Authority without delay and states the reasons why the conditions set out in this sub-regulation are fulfilled and the amount of money requested.

(2) The Scheme shall ensure that the loan shall be subject to the following conditions:

(a) the borrowing DGS must repay the loan within five years. It may repay the loan in annual instalments. Interest shall be due only at the time of repayment;

(b) the interest rate set must be at least equivalent to the marginal lending facility rate of the European Central Bank during the credit period;

(c) the Scheme must inform the European Banking Authority of the initial interest rate and the duration of the loan.

(3) The Scheme shall ensure that the contributions levied by the borrowing DGS are sufficient to reimburse the amount borrowed and to re-establish the target level as soon as possible.