Legislation

ROYAL DECREE-LAW 4/1980 OF 28TH OF MARCH, GRANTING THE DEPOSIT GUARANTEE FUND IN BANKING INSTITUTIONS LEGAL PERSONALITY, AND OTHER AUXILIARY MEASURES (BOE OF 31st MARCH).

Royal Decree 3.048/1977, dated the 11th of November 1977, created the Bank Deposit Guarantee Fund with the fundamental aim of protecting depositors and, in particular, those small savers who are not always able to readily discern the situation of the institutions in which they deposit their funds, giving protection analogous to that offered in other countries that, over recent years, have created or reinforced various different deposit insurance systems for their financial institutions.

Over the time that has passed since its creation the Deposit Guarantee Fund has been a valuable instrument with which to confront problems arising in our financial system, but precisely this experience of its operation has shown that it would be appropriate to extend its possibilities of action, such that the object of the Fund is not simply to guarantee the deposits in the event of an Institution’s going into temporary receivership or bankruptcy, but to enable it to also make an important contribution to the solvency and operation of banks, for which purpose it is necessary to endow it with legal personality and full legal capacity.

Also, it is necessary to modify the provisions of the Law of Joint-Stock Companies in relation to quorum and notice periods for General Shareholders’ Meetings so that such meetings can be legally called and constituted in the specific case where the Banco de España believes it to be absolutely essential to re-establish the capital and financial balance of banking institutions.

By virtue of which, and pursuant to article eighty-six of the Constitution, it is hereby

D E C R E E D:

Article 1

One. The Deposit Insurance Fund for Banking Institutions, created by Royal Decree 3048/1977, of the 11th of November 1977, shall have public legal personality, with full capacity for the carrying out of its functions under private law and without subjection to the rules governing autonomous government organizations and State-owned Companies.

Two. Its purpose shall be to guarantee the deposits held in Banking Institutions in the way and to the extent that the Government establishes, and also to carry out any such actions as it considers necessary to reinforce the solvency and proper functioning of the banks, in the defence of their interests of their depositors and of the Fund itself.

Three1. The assets of the Fund shall be provided by annual contributions from the banks which form part of it, equivalent at most to the 1 per 1000 of their deposits, together with an annual contribution from the Banco de España equal to the sum of the contributions from the other banks.

Article 2.- The fiscal regime governing the Fund shall be as follows:

a) For the purposes of Corporation Tax, the rules envisaged for the Banco de España laid down in the 5.1. article, of Law 61/1978, of the 27th of December, shall be applicable to the Fund.

b) The Fund shall be exempt from any indirect taxes that could accrue to it as a consequence of its formation, its operation and the actions or transactions that it carries out in the fulfilment of its purpose. This exemption shall also extend to transactions subject to indirect taxes applicable to the Fund by virtue of the provisions that regulate them.

Article 3

Resolutions for the modification of the share capital of a Banking Institutions, when made necessary in order to re-establish the financial and asset balance of the Bank, and when given specific instructions to do so by the Banco de España, may be adopted by the first session of a General Shareholders’ Meeting by a majority among shareholders (whether present in person or in representation) accounting for at least fifty per cent of the paid-in capital. At the second session only twenty-five per cent of the share capital need be represented, and in both cases this is regardless of the number of shareholders present. A period of seven days between notification of the General Shareholders’ Meeting and its being held shall be considered sufficient notice.

Article 4

The Government, upon proposal, whether collective or individual, by the Ministries of Justice, the Treasury and the Economy, in the area of their respective competencies, shall dictate the precise measures for the implementation and application of the present Royal Decree-Law, which shall come into effect the day following their publication in the "Official State Gazette".

1) Modify. be Real Decreto-Ley 18/1982.