Tasks of the Resolution Fund

With the creation of the Resolution Fund (Hungary), a new element has been added to the financial stability safety net. The Resolution Fund (Hungary), funded by the member institutions, aims to meet the funding needs of the financial sector without the need for public resources.

The main tasks of the Resolution Fund (Hungary) are to cover the costs incurred in the resolution phase of institutional crisis management, and to finance the use of resolution tools. According to Section 126 of Act XXXVII of 2014 on the Further Development of the Institutional System Strengthening the Security of Certain Actors of the Financial Intermediary System (hereinafter: “Resolution Act”) the assets of the Resolution Fund (Hungary) can be used:

  1. to guarantee the assets or the liabilities of the institution under resolution, its subsidiaries, bridge institutions or resolution asset management vehicles,
  2. to lend to the institution under resolution, its subsidiaries, bridge institutions or resolution asset management vehicles,
  3. to purchase assets of the institution under resolution,
  4. to provide capital contribution to a bridge institution or an asset management vehicle,
  5. to provide contribution to the institution under resolution for the purposes specified in Sections 59 to 60 of the Resolution Act,
  6. to reimburse the National Deposit Insurance Fund (hereinafter: “OBA”) in accordance with Section 143(5) of the Resolution Act,
  7. to compensate shareholders or creditors in accordance with Section 98 of the Resolution Act,
  8. to ensure that the principle of fiscal neutrality as set out in Section 128 of the Resolution Act is observed,
  9. to grant a loan on a voluntary basis to the resolution financing scheme of another EEA state,
  10. any combination of the actions referred to in items (a) to (i) hereinabove,
  11. to use the funds of the Resolution Fund (Hungary) for the actions set forth in items (a) to (d) hereinabove during the application of the sale of business tool with respect to the recipient, and
  12. to cover the costs directly related to the operation of the Resolution Fund (Hungary).

The assets of the Resolution Fund (Hungary) shall not be used directly to cover the losses of or to recapitalise an institution, a financial enterprise, a financial holding company, a mixed financial holding company or a holding company of miscellaneous operations.