The Financial Market Authority (FMA) has banned the European American Investment Bank (Euram) from continuing its business activities with immediate effect. The financial institution will therefore make a plea for deposit guarantee, the authority announced in a press release on Wednesday – in this specific case it concerns 37.6 million euros.
She justified the move with inadequate self-phasing-out plans, which the bank presented after an extraordinary general meeting on Tuesday.
Immediate payment stop
The FMA had presented the bank’s owners with two alternatives: implement a capital increase of 25 million euros or decide on an orderly self-winding. But nothing will come of this, because a successful settlement was not presented “consistently and plausibly”, the FMA writes.
The forced closure results in a cessation of payments for covered deposits: deposits, withdrawals or transfers are no longer possible.
Deposit insurance protects investors
Deposit insurance protects investors against losses, for example in the event of bankruptcy. The system provides that deposits are protected up to a maximum of EUR 100,000 per person and credit institution, in certain cases up to EUR 500,000. If a security event occurs, compensation must be paid within a maximum of seven days.
According to the first information, EUR 37.6 million is covered by deposit insurance. This is the fifth security incident since the system’s reorganization in 2019.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
