The Council of Ministers approved the draft law regulating the Andorran deposit guarantee fund and the Andorran investment guarantee system, to comply with the transposition of the regulations contemplated in the Monetary Agreement. In addition, this draft law harmonizes the protection of deposit and investment holders for banking and financial investment institutions with the European Union.

 The bill approved sets out the contributions that institutions must make to the Andorran Deposit Guarantee Fund and regulates the guarantees offered to depositors. It also stipulates that institutions must make the contributions determined each year to ensure the fund has financial resources equivalent to 0.8% of guaranteed deposits by 30th June 2024, as laid down in the European directive. Thus, the fund maintains the coverage regime of 100,000 euros per depositor and per institution.

Banks are expected to continue to make annual contributions (0.8 per cent) to the Andorran Deposit Guarantee Fund from their income statement over a period of eight years. Thus, at the end of this period, the fund will have 1.6% guaranteed deposits, much more than the European directive provides for.

 In addition, the text establishes a transition period during which there will be a dual system, in which the deposit guarantee system for banks created by the 2011 Law will coexist with the new fund. Thus, it is envisaged that banks will be required to hold a portion of the deposit-guarantee reserves that have already been established in compliance with the 2011 Law on the Creation of a Deposit Guarantee Scheme for Banks. The funds from these reserves could only be used immediately at the request of the Fagadi Management Commission.

The text also maintains the Andorran Investment Guarantee System, as a subsequent guarantee system, and incorporates the participation of financial investment institutions and collective investment undertakings management companies, which are added to the banking institutions, which already participated.

Text: Govern d’Andorra