Deposit Guarantee Schemes

The objecive of Directive 2014/49/EU is to ensure a quick compensation of bank account holders in case of a bank failure. The current deadline for compensation of 20 working days will be reduced to seven working days. In order to ensure that the deposit guarantee schemes have financial means that are proportionate to their liabilities and that these financial means are safeguarded against potential losses, the directive provides for a funding mechanism in several steps and restrictions on investment of the financial means. As a first funding measure, every deposit guarantee scheme must have at its disposal ex-ante 0.8% of covered deposits. The calculation of the credit institutions' contributions is based on the institutions' risk profiles.

Useful document

Directive 2014/49/EU of the European Parliament and the Council of 16 April 2014 on deposit guarantee schemes (DGSD)