SEC Form 20-F - Deutsche Bank Annual Report 2012
SEC Form 20-F - Deutsche Bank Annual Report 2012
SEC Form 20-F - Deutsche Bank Annual Report 2012
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<strong>Deutsche</strong> <strong>Bank</strong><br />
<strong>Annual</strong> <strong>Report</strong> <strong>20</strong>10 on <strong>Form</strong> <strong>20</strong>-F<br />
Item 4: Information on the Company 42<br />
proceeding. If the statutory requirements are met, the court appoints a stabilization advisor who oversees the<br />
implementation of the stabilization plan and has the authority to issue orders to the management of the bank.<br />
If a bank considers a stabilization proceeding to be futile, it may initiate reorganization proceedings, provided<br />
that the bank has systemic relevance and is at risk to become insolvent. The bank must then submit a reorganization<br />
plan to the BaFin. This reorganization plan may in particular provide for debt-to-equity swaps, contributions<br />
in kind, capital increases and reductions, an exclusion of subscription rights and the spin-off of parts of<br />
the bank. Upon application by the BaFin, the court must order the opening of reorganization proceedings if the<br />
statutory requirements are met. If reorganization proceedings are opened, each class of creditors and the<br />
shareholders resolve independently on the adoption of the restructuring plan. Under certain conditions, the<br />
reorganization plan may also be implemented without the approval of a class of creditors or the shareholders<br />
(i.e., it can be forced upon the shareholders).<br />
The BaFin may also restructure a bank that has systemic relevance and is at risk to become insolvent by transferring<br />
assets and liabilities of such bank in whole or in part to another bank in Germany including a so-called<br />
bridge bank owned by the Restructuring Fund (Restrukturierungsfonds) managed by the Federal Agency for<br />
Financial Market Stabilization (Bundesanstalt für Finanzmarktstabilisierung). Such fund is financed by non-tax<br />
deductible annual contributions from the banks from September 30, <strong>20</strong>11 onwards. The amount of contributions<br />
will depend on the business volume, size and interconnectedness in the financial market of the respective<br />
banks.<br />
Deposit Protection in Germany<br />
The Deposit Guarantee Act<br />
The Law on Deposit Insurance and Investor Compensation (Einlagensicherungs- und Anlegerentschädigungsgesetz,<br />
the Deposit Guarantee Act) provides for a mandatory deposit insurance system in Germany. It requires<br />
that each German bank participate in one of the licensed government-controlled investor compensation institutions<br />
(Entschädigungseinrichtungen). Entschädigungseinrichtung deutscher <strong>Bank</strong>en GmbH acts as the investor<br />
compensation institution for private sector banks such as us, collects and administers the contributions of the<br />
member banks, and settles the compensation claims of investors in accordance with the Deposit Guarantee Act.<br />
Investor compensation institutions are liable only for obligations resulting from deposits and securities transactions<br />
that are denominated in euro or the currency of a contracting state to the Agreement on the European<br />
Economic Area. They are not liable for obligations represented by instruments in bearer form or negotiable by<br />
endorsement. Claims of certain entities, such as banks, financial institutions (Finanzinstitute), insurance companies,<br />
investment funds, the Federal Republic of Germany, the German federal states, municipalities and<br />
medium-sized and large corporations, are not protected. The maximum liability of an investor compensation<br />
institution to any one creditor is limited to an amount of € 100,000, and to 90 % of any one creditor’s aggregate<br />
claims arising from securities transactions up to an amount of € <strong>20</strong>,000.<br />
<strong>Bank</strong>s are obliged to make annual contributions to the investor compensation institution in which they participate.<br />
An investor compensation institution must levy special contributions on the banks participating therein or take up<br />
loans, whenever it is necessary to settle compensation claims by such institution in accordance with the Deposit<br />
Guarantee Act. There is no absolute limit on such special contributions. The investor compensation institution<br />
may exempt a bank from special contributions in whole or in part if full payments of such contributions are likely<br />
to render such bank unable to repay its deposits or perform its obligations under securities transactions. The<br />
amount of such contribution will then be added proportionately to the special contributions
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