Azerbaijan Deposit Insurance Fund (ADIF) has started payment of compensations to the last remaining uninsured depositors
of Azerbaijan's Ganjabank OJSC, the ADIF said in a message Feb.
Proceeds from the sale of closed banks' properties are added to the pool of liquid assets of these banks for distribution to uninsured depositors
and other creditors in accordance with the rules on concurrence and preference of credits.
Then, the bank had bailed-in its uninsured depositors
and was forced to absorb the operations of its main competitor Cyprus Popular Bank, widely known as Laiki, after they both gave up their operations in Greece.
Proceeds from the sale of closed banks properties are used to increase the chances of recovery of uninsured depositors
and creditors of their trapped funds while gains from the sale of corporate assets are added to the Deposit Insurance Fund, PDICs main fund source for payment of valid deposit insurance claims.
PDIC also takes over the banks ordered closed by the Monetary Board; administers closed banks' assets, records and affairs; as well as preserves and disposes such assets for the benefit of the creditors and uninsured depositors
, it added.
will thus improve their chances of recovery from the assets of closed banks, since their claims will be settled ahead of other ordinary creditors.
material losses for Corpbank's uninsured depositors
It is unclear, however, how the authorities will be able to protect Corpbankas uninsured depositors
with the government of Prime Minister Plamen Oresharski having now resigned and Parliament awaiting to be dissolved to open the way for early elections.
In the financial sector, the main policy measure adopted in 2013 included the bail-in of uninsured depositors
and the imposition of restrictive measures in the economy, in order to safeguard financial stability in the domestic economy.
Since the mid-1980s, a number of studies have examined whether uninsured depositors
respond to bank risks by withdrawing their deposits and/or requiring higher interest rates.
He added, "The FDIC will continue to pursue litigation where necessary in order to recover as much as possible for FDIC receiverships, money that is ultimately returned to the Deposit Insurance Fund, uninsured depositors
and creditors of failed banks.
Whatever the final deal and one was reached in the nick of time early on Monday that included a stiff tax on uninsured depositors
in the two largest banks much damage has already been done by the escalating uncertainty of the preceding 10 days.