What is FGO

What is new

The protection of Fondo di Garanzia degli Obbligazionisti BCC (Bonholders Guarantee Fund BCC) also in the event of termination and application of Bail-In.
The Assembly of FGO adopted in Rome, the statutory change which was made necessary by the new rules on the prevention and management of banking crises.

History

The Guarantee Fund for holders of bonds issued by banks belonging to the Cooperative Credit System was born in Rome on the 23rd of July 2004, an absolute novelty for the Italian banking system.

The Fund –was formed on a voluntary consortium basis between the Banks of the Cooperative Credit System and the Italian Rural Banks- it has been operating since the 1st of January 2005 and has the aim to protect the credit right of bond holders of the same companies.
The purchase of “Guaranteed Bonds” (which are marked by a proper trademark and ISIN code) enables client savers of the BCCs-without any increase in costs-to obtain guarantee of refund in the event of insolvency of the issuing bank.

Since the membership of each BCC to the Fund, the Regulations concerning the “guaranteed” bonds contain a clause in favour of the bondholders, the right to payment by the Consortium and in case of insolvency of the issuer, of the amount subscribed within the maximum amount allowed of 103.291,38 euros.

Protection is subjective and therefore concerns the holder of the bonds, within the maximum amount allowed of 103.291,38 euros calculated on the entire amount of the securities held, whatever the emissions from which they are derived individually and where the requirement of the continuous possession for at least a period of three months is satisfied.
Irrelevant is the fact that the securities have been subscribed on the issue of a loan or were purchased later, being able to detect this condition only for the determination of the ownership period and it is only relevant to use of the guarantee.
Technically the Banks that are part of the Consortium are not asked to pay sums of money, but must have them ready in case of need.

Moreover, it must be noted that the subscription to the Fund is allowed only to the BCCs part of the association lead by Federcasse.

The initiative of the Fund’s establishment reinforces the solidity and reliability of the Cooperative Credit and embodies the solidarity system that has always guided the action of the Italian Cooperative Credit System, to protect customers’ interests and the development of the mutualistic cooperative credit system in our country.