Legislation

The Czech legislation for the framework for financial market stability support is based on two European directives. The first is Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms, known under its English title - the Bank Recovery and Resolution Directive or the BRRD. This directive has been implemented into the Czech legal system by Act Coll. 374/2015. By this Act, on 1st January 2016, the Financial Market Guarantee system was founded through transformation from the former Deposit Insurance Fund. In relation to the enactment of the Financial Crisis Prevention and Resolution Act, a number of other Acts were amended by Act No 375/2015 Coll., while the Act on Banks underwent the most significant change.

The second European directive is Directive 2014/49/EU of the European Parliament and of the Council on deposit guarantee schemes(known under its English title the Deposit Guarantee Scheme Directive or as DGSD). This directive is reflected in the Czech legal system in Act No. 21/1992 Coll., on Banks, as amended.

A key role in ensuring the stability of financial markets at European level is played by the European Banking Authority(EBA). The Directive 2014/59/EU empowered EBA to issue a range of binding technical standards, guidelines and reports with the aim of establishing effective and consistent crisis prevention and resolution procedures in the financial sector. The primary objective in building this framework is to strengthen financial stability, reduce moral hazard, protect depositors and, in the event of a crisis, ensure the continuity of the core processes essential to the uninterrupted functioning of the financial system, save public spending and ensure the smooth functioning of the internal market for the provision of financial services.These activities are accompanied by continuous evaluation of the impacts brought by the Directive 2014/49/EU on deposit guarantee schemes that also empowers the EBA to perform many regulatory activities.

Legislation relevant to Guarantee System activities:

Useful links to legislation relevant to deposit insurance:

Useful links to legislation relevant to crisis resolution mechanisms: