Annual Report - paperJam

7.
Client protection
The AGDL (Association pour la Garantie des
Dépôts Luxembourg) was established in 1989.
The purpose was to set up a mutual guarantee
scheme covering cash deposits of the customers
of credit institutions. Since the European Directive
1997/9/EC, the AGDL also covers claims arising
from investment transactions in favour of investors
with credit institutions and investment firms.
The ABBL and the AGDL are two separate
and independent organisations. They are linked
through a service level agreement by which the
day-to-day administrative work of the AGDL is
carried out by the ABBL Secretariat.
Failure of Icelandic banks
On 8 and 9 October 2008, the Luxembourg
District Court declared three members of
the AGDL, Glitnir Bank Luxembourg S.A.,
Landsbanki Luxembourg S.A. and Kaupthing
Bank Luxembourg S.A. in suspension of
payments.
Only the guarantee scheme covering the cash
deposits was set in motion, since the investment
instruments were available in the three banks,
allowing the clients to recover their entire portfolios.
The AGDL’s intervention was thus limited
to a maximum amount of 20,000 € per client.
The process of compensation of the clients was
managed by the AGDL on the basis of a longstanding
outsourcing contract with a consultant
firm. Within a few days, the AGDL was thus
able to increase the regular staff of 2 persons
up to 20 persons. The computerised system,
developed in cooperation with this consultant
and tested yearly was entirely efficient and
permitted the simultaneous processing of the
calls for funds from the 244 members of the
AGDL, the administration of the clients’ applications
for compensation, the reconciliation of the
clients’ applications with the figures available in
the books of the banks and the final payment to
the client.
Thanks to this system and the substantial efforts
made by its staff, the AGDL was able to compensate,
from December 2008 and during the whole
year 2009 more than 15.000 customers of the
three banks, most of them being customers of
Kaupthing Bank Luxembourg S.A., and continued
to compensate the clients of Landsbanki
Luxembourg S.A. during the year 2010.
Following a restructuring plan, Glitnir has, since
April 2009, entered a proceeding of voluntary
winding-up. The AGDL recovered its debt and
the Glitnir case has been closed.
Through a restructuring plan approved in
July 2009, Kaupthing, was split in two parts:
1. creation of Pillar Securitisation S.à r.l.,
which took over the debts (among others
AGDL) of Kaupthing and 2. creation of a new
Bank “Banque Havilland S.A.” which took over
23 July 2010
EU banks pass stress tests. The Luxembourg banks
showed good results.
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