Article 12

Deposit Guarantee Schemes Directive (DGSD) > Article 12
Article 12
Borrowing between DGSs
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1. Members States may allow DGSs to lend to other DGSs within the Union on a voluntary basis, provided that the following conditions are met:
(a) the borrowing DGS is not able to fulfil its obligations under Article 9(1) because of a lack of available financial means as referred to in Article 10;
(b) the borrowing DGS has made recourse to extraordinary contributions referred in Article 10(8);
(c) the borrowing DGS undertakes the legal commitment that the borrowed funds will be used in order to pay claims under Article 9(1);
(d) the borrowing DGS is not currently subject to an obligation to repay a loan to other DGSs under this Article;
(e) the borrowing DGS states the amount of money requested;
(f) the total amount lent does not exceed 0,5 % of covered deposits of the borrowing DGS;
(g) the borrowing DGS informs EBA without delay and states the reasons why the conditions set out in this paragraph are fulfilled and the amount of money requested.
2. The loan shall be subject to the following conditions:
(a) the borrowing DGS must repay the loan within five years. It may repay the loan in annual instalments. Interest shall be due only at the time of repayment;
(b) the interest rate set must be at least equivalent to the marginal lending facility rate of the European Central Bank during the credit period;
(c) the lending DGS must inform EBA of the initial interest rate and the duration of the loan.
3. Member States shall ensure that the contributions levied by the borrowing DGS are sufficient to reimburse the amount borrowed and to re-establish the target level as soon as possible.