Draft Law No.4546: what to expect?
Despite a number of positive novelties recommended in Draft Law No.4546 On Amendments to Some Legislative Acts of Ukraine to Improve Mechanisms of Withdrawing Banks from the Market and Granting Claims of Creditors of These Banks, some of them are rather debatable.
In particular, the Draft Law recommends alteration of Article 52 of the Law of Ukraine On the System of Insurance of Individuals’ Deposits (hereinafter — the Law), which authorizes the Fund to file a claim on damages inflicted upon creditors against persons who are liable for such damages even after termination of an insolvent bank as a legal entity.
Respective amendments will also be made to procedural codes which enshrine that proceedings in a case of reimbursement of damages initiated by the DGF, acting in the interests of the non-solvent bank or creditors of such a bank, even in the event of its termination as a legal entity, may not be ceased.
First and foremost, it should be remembered that the powers of the DGF with regard to a problem bank arise solely on the grounds of a respective decision adopted by the regulator and within the current procedure of withdrawing the bank from the market. At the same time, the Law does not spell out that the DGF is delegated powers to act in the interest of the bank beyond the procedure of withdrawing the bank from the market, and neither does it envisage the possibility to introduce such procedures with regard to the terminated bank.
Moreover, of rather debatable nature is the Draft vesting the DGF with the right to address persons who, in accordance with legislation, are held liable for damages (losses) inflicted on creditors. To reimburse damages inflicted upon the creditor by unlawful acts carried by persons related to the bank is an exclusive right of such a creditor, which may not be assigned without a respective juristic act with the creditor.
In my opinion, in order to avoid legal collisions, it would be more appropriate to introduce a regulation which would enable the DGF to continue liquidating the bank until all processes related to this procedure, including recovery of losses inflicted upon creditors or banks due to the acts of third persons, are complete.