Estonia planning tighter regulation for savings and loan associations
Creditors of the recently bankrupt Estonia Savings and Loan Association met for its general meeting on Monday but have little hope of seeing their savings restored to them. Estonia plans to step up supervision of savings and loan associations.
A few hundred people gathered for the meeting, most of them elderly. Trustee in bankruptcy Martin Krupp said that around one thousand creditors lost a total of €17 million.
"To the best of my knowledge, the largest creditor's contribution is €215,000. Looking at the median sum, it is around €19,000 per creditor," Krupp said. The trustee said that the chances of having the money restored are relatively slim. "The most important thing today is to register the claims. Without that, people have no hope of seeing their savings again," he explained.
The people who had gathered for the meeting were also less than hopeful. "Absolutely, I have very little faith as the schemes employed have been intricate but we'll still try as hope dies last," Rein said.
Other depositors named Rein and Irina lost around €2,500 to the association. They also believe they will not see their money again.
"To be honest, there is no hope as information that has come to light so far suggests the director, whom we all so naively trusted, has placed the money in his subsidiaries," Rein said.
Rein and Irina are trying to remain positive and move on with their lives. "We can live, we have enough to eat, and that's it really. What's lost is lost," Irina said.
State supervision over savings and loan associations has been basically lacking, with the bankruptcy of the Estonia Savings and Loan Association following the collapse and charges of fraud against Erial. The Ministry of Finance intends to introduce tighter regulation now.
Four changes are planned. From specifying what kind of information savings and loan associations must provide to limiting power of attorney.
"Thirdly, we would like to boost the role of auditors, both external and internal ones. We are also weighing whether larger savings and loan associations could move under the Financial Supervision Authority's control," said Thomas Auväärt. "Fourthly, we would like to limit advertising. It sometimes feels that advertising is too simple in terms of its language, and that it shouldn't be."
Auväärt said that there should be draft legislation within one month and it could reach the Riigikogu early next year.
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Editor: Marcus Turovski