The Institutional Protection Scheme of the Savings Banks Finance Group
Savings banks are not primarily focused on maximising profits and therefore avoid excessive risks. Nevertheless, it can never be completely ruled out that a bank may run into financial difficulties. For this reason, the Savings Banks Finance Group has an Institutional Protection Scheme, which was recognised as a deposit guarantee scheme under Germany’s Deposit Guarantee Act (EinSiG) on 3 July 2015. The scheme is composed of 13 guarantee funds:
- the guarantee funds of the regional savings banks associations,
- the guarantee fund of the Landesbausparkassen, and
- the guarantee fund of the Landesbanken and giro centres.
Since the establishment of the Institutional Protection Scheme in the 1970s, no member institution has ever defaulted. In the Savings Banks Finance Group, no customers have lost any their deposits or interest.
Institutional Protection Scheme and statutory deposit guarantee scheme
In Germany, the Deposit Guarantee Act (EinSiG) entered into force on 3 July 2015. The Act implements the relevant EU Directive. The Savings Banks Finance Group has modified its proven Institutional Protection Scheme to meet the statutory requirements, and the scheme has been recognised as a deposit guarantee scheme under the Deposit Guarantee Act.
1. Institutional Protection Scheme
The key objective of the Institutional Protection Scheme is to protect the member institutions and to avert emerging or existing financial difficulties for these institutions. In this way, we avoid having to use the deposit guarantee scheme while fully protecting the business relationships with our customers. The protection afforded by the scheme covers customer claims relating to:
- savings deposits,
- savings certificates,
- time deposits,
- sight deposits, and
- bearer bonds.
2. Statutory deposit guarantee scheme
The Institutional Protection Scheme of the Savings Banks Finance Group has been officially recognised as a deposit guarantee scheme under the Deposit Guarantee Act. Under the statutory deposit guarantee scheme, customers have the right to have up to
€ 100,000 of their deposits refunded, as stipulated in the Deposit Guarantee Act.