(1) Where resolution action is taken in respect of an institution or a group entity, and this ensures that the depositors of that institution or group entity retain access to their deposits, the deposit guarantee scheme to which the institution or group entity belongs is liable 1. where the creditor participation instrument is applied: for the amount by which the covered deposits would have been written down to offset the institution's or group entity's losses under section 96(1), point 1, had the covered deposits not been excluded from the scope of the creditor participation instrument and therefore written down to the same extent, or 2. where one or more resolution tools other than the creditor participation instrument are applied: for the amount of losses that the holders of covered deposits would have suffered as a result of applying those tools.
(2) The deposit guarantee scheme's liability under subsection (1) does not exceed the amount of losses it would have had to bear had insolvency proceedings been opened and carried out over the assets of the institution or group entity.
(3) Where the creditor participation instrument is applied, the deposit guarantee scheme is not required to make a contribution towards restoring the Common Equity Tier 1 ratio under section 96(1), point 2.
(4) The amount for which the deposit guarantee scheme is liable under subsection (1) is determined on the basis of a valuation under section 69 of this Act. The deposit guarantee scheme pays a contribution in cash in that amount.
(5) Where eligible deposits at an institution or group entity under resolution are transferred to another legal entity through the application of the business sale tool or the tool of transfer to a bridge institution, the depositor concerned has no claim for compensation under section 5(1) of the Deposit Guarantee Act against the deposit guarantee scheme in respect of the part of the deposit that is not transferred, where the amount of the deposit transferred reaches or exceeds the coverage limit under section 8 of the Deposit Guarantee Act.
(6) The liability of the deposit guarantee scheme is limited to half of the target level under Article 10 of Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, p. 149).
Subdivision 3
Compensation for Disadvantaged Shareholders, Creditors and Deposit Guarantee Schemes; Protective Provisions