A new provision with significant implications for Greece’s financial safety net has been included in a draft bill currently under public consultation by the Ministry of National Economy and Finance. The measure concerns the Hellenic Deposit and Investment Guarantee Fund (TEKE), the body responsible for protecting depositors and supporting bank resolution efforts.
Specifically, the bill amends Law 4370/2016 by introducing Article 24A, which sets out how potential shortfalls in value will be addressed during the resolution of troubled banks. In practical terms, when a credit institution is placed under special resolution—a process designed either to rescue it or to wind it down in an orderly manner—there can be a gap between the value of its assets and its liabilities. Under the new framework, if the Bank of Greece later determines that such a gap exists, TEKE will be required to cover it.
The mechanism works in two parts. TEKE’s Deposit Guarantee Scheme will assume responsibility for the portion that relates to depositors with guaranteed funds, meaning deposits protected under Greek and European law. Any remaining shortfall that goes beyond the guaranteed deposits will fall under TEKE’s Resolution Scheme. Should the Resolution Scheme lack the necessary resources, it will be allowed to borrow from the Deposit Guarantee Scheme or call on banks to provide extraordinary contributions. The precise terms for such borrowing and repayment will be set by TEKE’s Board of Directors.
