By-laws of the Deposit Protection Fund

2. if developments or circumstances arise with the member bank that, in
accordance with §45 German Banking Act (KWG) or §36 Act on the Recovery
and Resolution of Financial Institutions (SAG), would justify actions by the
supervisory authority or
3. if the rating result of the member bank according to §4 paragraph 1
sentence 1 No. 7 is inferior to “BBB” or
4. if an “increased latent risk” pursuant to sentence 2 is detected by the
Auditing Association or
5. if, in the course of a resolution action according to the Act on the Recovery
and Resolution of Financial Institutions (SAG) or an assisting action in
accordance with §2 paragraph 2 of the By-laws of the Deposit Protection
Fund, a “disproportionate claim” at the expense of the Deposit Protection
Fund in the sense of sentence 3 is imminent or
6. if said conditions are apt to avert any misuse or any otherwise imminent
threat of recourse to the Deposit Protection Fund.
(2) An increased latent risk which may have a seriously detrimental effect on the
present or future financial position, net asset position and/or earnings position of
a bank and which leads to a “capital lock-up” of the member bank’s equity and/
or hidden reserves is in particular deemed to exist
1. if in the course of an audit an asset or debit item cannot be conclusively
assessed (e.g. due to the absence of any proof of the value of the asset
item or an inability to assess the value of a security) or
2. if – set against the financial situation of the bank or the borrower –
lending on an unsecured basis is deemed to be too high or
3. if a loan – irrespective of its regulatory risk weighting – accounts for
100% of the bank’s own funds (not applicable to loans that – according
to the assessment standards of the Auditing Association – are regarded
as fully collateralised or to loans to central banks, central governments
and regional governments in member states of the Organisation
By-laws Annex to Section 5 (5)
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