Bank deposit protection

Bank deposit protection

In the foreign banking practice there are two distinct, but not mutually exclusive ways to deposit insurance. Personal insurance, when, for example, when the death of the owner of the deposit a credit balance on the account is doubled and general insurance, providing assistance to banks facing difficulties and reimbursement of losses to investors.


In the first case prosecuted commercial objectives; the initiative comes from the bank with the support of the insurance company. The second addresses the overall economic and social objectives. Its initiator are state bodies or the banking system as a whole. In the United States, Japan, Britain established by law and functioning insurance system financed by contributions. In other countries, such as Germany and Italy, a common deposit insurance is organized by the banks themselves, which make contributions to a special fund. In France, under Article 52 of the Banking Act, the Bank of France to control the duty to organize the support to banks in difficulty, or at least protect their depositors, involving, if necessary, with other banks. Consider some of the country with its deposit protection system.

Bank deposit protection in United Kingdom

In 1979 and 1987. Banking regulations were adopted in the United Kingdom. According to the Act in 1979, banks should provide guarantees to depositors in the event of various crises in the UK economy. The law was approved by the "deposit protection scheme" investors, which included a set of actions required for banks. In particular, each bank and the LOPD (licensed organization that takes deposits) had to create a special insurance fund, the minimum size of which was determined in the 5 million pounds. These funds are under the control of the Bank of England to protect the deposits of the Council and could then be used only with permission.

According to the "deposit protection scheme", each individual investor could expect to receive coverage for the deposit is not more than 10 thousand f. Art. at the rate of 75% guaranteed return amount. This means for example that the deposit 8 thousand f. Art. the investor would have received compensation in the amount of 6 thousand f. Art., and on the contribution of 25 thousand f. Art. - Only 7 500 - the maximum possible amount of insurance. This scheme has found its practical application in the 80-ies .: for example, bankrupt LOPD Merbach Finance paid its depositors worth just under £ 700 thousand. Art.

However, the act of 1979 was unable to prevent a number of serious crises that have occurred in the country in the 80s. (In particular, we are talking about high-profile bankruptcy of a banking group Johnson Matthew Bankers in 1983-1984.). In this connection, in 1987 it signed a new law on banking. Banking Act 1987 partially changed and the "deposit protection system." "Deposit Protection Scheme" in general remained the same, the only difference is that the maximum amount of the contribution for which was given to 75% of compensation, increased to £ 15 thousand. Art.

And in February 1994, he went bankrupt famous bank Barigns UK, with an impeccable history stretching back 233 years. Its chairman young Nick Leeson bankrupted thousands of investors, the bank's owners, British intelligence and personally queen of Great Britain.

Currently in England the deposits of depositors are protected only for three-quarters of the amount paid. The maximum amount of compensation is 20 thousand f. Art. (30 thousand dollars.).


In 1994, in order to streamline the protection of deposits accepted in England relevant Directive (EU). The main innovations are as follows.

Offset by deposits opened in all branches of Western banks located in England; offset by deposits opened not only in pounds sterling, and other currencies; the maximum amount of compensation on the deposit in the amount of 20 thousand f. Art. increased to 90%; foreign investors (non-English) Bank receive compensation provided for deposit protection system, which now has the ability to connect to the Deposit Protection Fund of the British in order to obtain enhanced compensation in case of failure in the country of location of the bank. Finally, as regards deposits, Western European banks have an equal right to the banks within the territory of England.

Bank deposit protection in USA

Every contribution of more than $ 100 thousand. Is insured by the Federal Deposit Insurance Corporation (FDIC). The latter was established in 1934 to protect the financial savings of depositors in the event of bank failure. Most US banks are members of the FDIC.

Any account can be opened both on one and two, three. Typically, these general accounts opened one family: a husband and wife; the mother (father) and children. There may be a common expense and children. This is particularly advantageous if the family savings exceed $ 100 thousand -. The total amount of savings is divided into several accounts. Some of these accounts will be personal, and some -. General, the contribution of each $ 100 thousand As a result, the entire amount of savings is insured at the FDIC.

Currently the FDIC is the value that this organization gives investors confidence in the stability of the banking system and eliminates the possibility of a chain of bank failures.