The boundaries of the normative regulation of the system of guaranteeing deposits of individuals
Authors:   Alla Helych, Yulia Helych
Published: April 2023

The purpose of the work is to determine the boundaries of regulatory regulation of the deposit guarantee system of individuals, the prospects for their changes, as well as the feasibility of the powers of the Fund.

This legal consolidation allows us to conclude that the Fund is not a property management body (in particular, cash), so the existence of power to regulate public relations within the guarantee system is unjustified, because it has functions, not authority, is an institution, and not a body that manages property (in particular, like a state enterprise in terms of economic management – Part 1 of Article 74 of the Economic Code of Ukraine), and does not implement public policy. So, the Fund actually combines in one person the function of accumulation and management of funds, as well as regulates the activities of banks in relation to these relations. This approach is contrary to Directive 2014/49/EU, which distinguishes between such institutions.

In this respect, it should be noted that this Directive 2014/49/EU is an important tool for achieving the internal market in terms of both freedom of establishment and freedom to provide financial services in the field of credit institutions, while increasing the stability of the banking system and depositors (p. 3 of Preamble). That is, it is a search for economic rather than administrative mechanisms for the existence of the system.

There are considerations about the limits of regulatory powers by the Fund, because in fact it is a structural regulation of the relationship of guaranteeing deposits of individuals. Moreover, given the functions of the Fund, defined in Art. 4 of the Law № 4452, the regulation of the participation of banks in the system of guaranteeing deposits of individuals is only a small component in the activities of this institution.

Moreover, Law № 4452 additionally contains a section devoted to the regulatory activities of the Fund. Without detailing the rules of this section, we should focus only on its hall provisions. Thus, according to Part 1 of Art. 30 of the Law № 4452 The Fund regulates the activities of banks by: 1) adoption, within the limits of its powers, of normative legal acts obligatory for execution by banks; 2) exercising control over the fulfillment of banks ’obligations in connection with their participation in the deposit guarantee system for individuals; 3) withdrawal of insolvent banks from the market; 4) in other forms provided by this Law.

Summarized that the trend of development of deposit guarantee relations is to strengthen the administrative influence of the Fund on the system, as well as giving this institution power in terms of regulation, which does not meet modern world trends. Under such conditions, the Fund can only have an economic impact on the deposit guarantee system, in particular in terms of proper preservation and accumulation of funds, while regulatory regulation should be concentrated exclusively within the powers of the National Bank of Ukraine.

Key words: normative regulation, deposit guarantee fund, economic regulation, deposit guarantee system of individuals, administrative regulation, normative-legal regulation.