By-laws of the Deposit Protection Fund
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pursuant to Section 5 (10) is, in <strong>the</strong> opinion <strong>of</strong> <strong>the</strong> Auditing Association, <strong>of</strong><br />
material value for discount purposes. When assessing <strong>the</strong> material value, due<br />
account shall be taken <strong>of</strong> <strong>the</strong> extent to which<br />
(a) <strong>the</strong> Declarations <strong>of</strong> Undertaking would be enforceable at law and in practice<br />
at reasonable effort and<br />
(b) <strong>the</strong> credit standing and freely disposable assets <strong>of</strong> <strong>the</strong> parties furnishing<br />
<strong>the</strong> Declarations <strong>of</strong> Undertaking would be sufficient to fully cover any<br />
hypo<strong>the</strong>tical loss incurred by <strong>the</strong> <strong>Fund</strong> in compensating depositors.<br />
The bank shall be required to make available to <strong>the</strong> Auditing Association <strong>the</strong><br />
information and pro<strong>of</strong> necessary for <strong>the</strong> assessment and to bear <strong>the</strong> cost <strong>of</strong> such<br />
assessment by <strong>the</strong> Auditing Association. For newly admitted banks, <strong>the</strong> material<br />
value shall be assessed for discount purposes until and including <strong>the</strong> third year<br />
following <strong>the</strong> year <strong>of</strong> admission and shall constitute <strong>the</strong> assessment <strong>of</strong> material<br />
value for <strong>the</strong> fourth following year. No discount shall be granted for Declarations<br />
<strong>of</strong> Undertaking that are furnished by banks.<br />
6. Depending on <strong>the</strong> results <strong>of</strong> <strong>the</strong> risk assessment performed by <strong>the</strong> Auditing<br />
Association pursuant to Section 4a, <strong>the</strong> annual contribution may increase<br />
(markup) or decrease (markdown). The risk assessment currently available<br />
(including one based on Section 4a (2), sentence 2 or Section 5a (12), sentence<br />
2) when <strong>the</strong> annual contribution is determined shall apply. For <strong>the</strong> credit rating,<br />
<strong>the</strong> own funds factor and <strong>the</strong> loss buffer ratio, markups or markdowns shall be<br />
calculated individually for this purpose. The individual markups or markdowns<br />
shall be added up, with any markups or markdowns for <strong>the</strong> credit rating being<br />
weighted at 50% and any markups or markdowns for <strong>the</strong> own funds factor and<br />
<strong>the</strong> loss buffer ratio each being weighted at 25%. The size <strong>of</strong> <strong>the</strong> markups or<br />
markdowns for <strong>the</strong> credit rating, <strong>the</strong> own funds factor and <strong>the</strong> loss buffer ratio<br />
shall be resolved upon by <strong>the</strong> <strong>Deposit</strong> <strong>Protection</strong> Committee in accordance with<br />
<strong>the</strong> following provisions:<br />
<strong>By</strong>-<strong>laws</strong><br />
Section 5a<br />
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