Market News

FACTBOX-European bank deposit schemes

(Updates with Czech Republic, Hungary & Slovakia)

Oct 7 (Reuters) - EU finance ministers, groping for a confidence-boosting response to the global financial crisis, were debating a sizeable hike in minimum levels of bank deposit insurance across the 27 European Union countries.

Here are details of bank deposit guarantee schemes in some European countries:


-- Austria said on Sunday it would follow Germany in guaranteeing the deposits of retail savers. However, a decision regarding the new level of the deposit guarantee would be made only after Monday’s meeting of EU finance ministers.

-- Deposits are currently guaranteed up to 20,000 euros ($27,720). There are several programmes for commercial, cooperative and savings banks, some of which voluntarily offer a higher guarantee.


-- The Bulgarian Deposit Insurance Fund insures depositors for amounts up to 40,000 levs (20,425 euros) in each bank.

-- All banks that operate in Bulgaria pay annual contributions to the fund. Branches of foreign banks operating in Bulgaria, whose headquarters are in countries where there are no guarantee schemes, also contribute to the fund.


Finance Minister Miroslav Kalousek said on Tuesday he would be willing to accept a doubling of the Czech deposit insurance limit which is now 25,000 euros ($33,980), but a blanket guarantee would go too far.


-- The Danish government early on Monday guaranteed all bank deposits in Denmark as part of a deal with banks to set up a 35 billion Danish crown ($6.50 billion) liquidation fund.

-- Until now the Guarantee Fund for Depositors and Investors covered cash deposits up to 300,000 crowns (40,201 euros). The Guarantee Fund covers deposits with the financial institution less any debt to the financial institution.


-- The deposit guarantee, known as a “cash guarantee”, gives each depositor a maximum compensation limit of 70,000 euros. The maximum guarantee applies to each institution, regardless of the number of accounts opened by the same depositor in France or in branches of the institution located in the European Economic Area.


-- Germany offered a blanket guarantee on bank deposits which would guarantee more than 500 billion euros ($693 billion) in private deposit accounts. Until now, the Compensation Scheme of German Banks (EdB) was limited to 90 percent of deposits and the equivalent of 20,000 euros for each depositor.

-- The Deposit Protection Fund of the Association of German Banks fully secures the deposits of customers at private commercial banks not covered by the EdB up to a ceiling of 30 percent of the relevant liable capital of each bank.


-- The Hellenic Deposit guarantee fund (TEK) insures depositors for amounts up to 20,000 euros in each bank. All banks pay into TEK, including foreign banks operating in Greece whose headquarters are outside the European Union. TEK’s liquid assets totalled 940 million euros in 2007.


-- Finance Minister Janos Veres told reporters early this month that the country did not need to raise the limit of individual deposits guaranteed by the National Deposit Insurance Fund (OBA). The OBA’s compensation limit is 6 million forints ($32,890).


-- Ireland had previously guaranteed bank deposits up to 20,000 euros, but raised the guarantee to 100,000 euros on Sept. 20. The scheme sets no limit to the funds guaranteed. The new pledge, which covers up to 400 billion euros ($575 billion) of liabilities and includes retail, commercial and interbank deposits, takes effect immediately and expires in September 2010.


-- Italy’s Interbank Deposit Protection Fund provides for a maximum level of protection equal to 103,291.38 euros per depositor.


-- The DGS guarantees balances up to a total of 40,000 euros for each account-holder in each institution (regardless of the number of accounts held). For each account-holder, the amount over 20,000 euros is subject to a 10 percent account-holder risk.


-- The Deposit Guarantee Fund covers in full the overall value of the cash credit balances of the depositor in each bank, whenever that value does not exceed 25,000 euros in each bank.


-- Slovakia’s finance minister said on Tuesday the country was discussing a possible extension of its bank deposit guarantees from 20,000 euros ($27,180) at present. However Prime Minister Robert Fico said the local banking sector was stable and there was no need to worry about deposits.


-- Slovenia guarantees bank deposits up to a maximum of 22,000 euros.


-- Spain said on Monday it would immediately increase bank deposit guarantees to boost confidence in the financial system. It did not say to what level. Previously the amount guaranteed in the euro zone’s fourth biggest economy was 20,000 euros ($27,180), the minimum under EU law, and backed by reserves.


-- Sweden is expanding its guarantee on bank deposits, the Ministry of Finance said on Monday. The guarantees for bank deposits would be raised to 500,000 Swedish crowns ($71,310) from 250,000, effective Monday.


-- The Financial Services Authority raised the compensation limit for savings deposits to 50,000 ($90,560) pounds for each customer claim from 35,000 pounds. This applies to each depositor for the total of their deposits with an organisation. (Writing by Carl Bagh and David Cutler; Editorial Reference Units in London & Bangalore; Editing by Paul Bolding)