# kaal:claim:2061166-018

**Claim.** The German bank levy is internally inconsistent because financial institutions without systemic relevance must contribute to the reorganization fund yet are ineligible to receive support payments from it.

**Type.** failure  **Support.** argued

**Holds when.**

- German reorganization fund financed by a levy on all German banks

**Source quote.**

> The German levy system is problematic because financial institutions without systemic relevance are required to contribute to the fund, yet are not able to receive fund support payments.

**From.** Christoph K. Henkel, Wulf A. Kaal, *Contingent Capital in European Union Bank Restructuring* (2012), (c) The Law Establishing the Reorganization Fund for Financial Institutions, page 51

**Cite as.** Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166

**Verify.** sha256 of source PDF `43625ea260d0fc045e86d3435df50c9d0ca4abf8542e6085a6165be6653b4a7b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Henkel%20and%20Kaal%20-%202012%20-%20Contingent%20Capital%20in%20European%20Union%20Bank%20Restructuring.pdf

**Failure mode.** Non-systemic banks pay for a fund they cannot draw on  (family: compliance-cost-and-barrier-to-entry)

**Topics.** systemic-risk

**Keywords.** bank-levy, reorganization-fund, german-banking-law, systemic-relevance, competitiveness

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