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Banks cut deposit insurance for private customers - up to this limit, your money will be safe in the future

2021-12-22T05:18:40.391Z


Banks cut deposit insurance for private customers - up to this limit, your money will be safe in the future Created: 12/22/2021, 06:05 AM Upper limits for deposit protection set by private banks © Andrea Warnecke As a consequence of the billions in costs after the collapse of the Greensill Bank in Bremen, Germany's private banks are gradually restricting their protection for customer deposits.


Banks cut deposit insurance for private customers - up to this limit, your money will be safe in the future

Created: 12/22/2021, 06:05 AM

Upper limits for deposit protection set by private banks © Andrea Warnecke

As a consequence of the billions in costs after the collapse of the Greensill Bank in Bremen, Germany's private banks are gradually restricting their protection for customer deposits.

Frankfurt / Berlin - Germany's private banks will in future be drawing new limits in terms of deposit insurance.

From 2023 on, upper limits will apply for the first time, as the Federal Association of German Banks (BdB) announced on Wednesday.

For private savers and foundations, a maximum of five million euros per bank is insured from January 1, 2023, and three million euros in 2025.

Once the reform has been fully implemented in 2030, the scope of protection for savers will then amount to a maximum of one million euros.

Deposit protection: Bankenverband BdB - "Nothing will change for 98 percent of savers"

The BdB emphasized: "For 98 percent of private savers, nothing changes in practice - their deposits are still fully protected."

Deposit protection for companies is also restricted.

An upper limit of 50 million euros will apply to them from 2023, this will drop to 30 million euros in 2025 and will still be a maximum of 10 million euros per bank in 2030.

Video: Signs of new record inflation

In Germany, savings of up to 100,000 euros per customer are legally protected in the event of a bank failure.

In addition, almost all credit institutions in this country voluntarily secure customer funds - usually far beyond what is legally required.

The BdB's deposit protection fund applies to private banks.

According to the association, a deposit of at least EUR 750,000 per bank is currently usually protected per customer.

According to the information, the security limits are significantly higher at many institutes.

There are comparable regulations at savings banks and cooperative banks.

"We focus deposit insurance on its core task: We protect those who really need this protection," said BdB President Christian Sewing.

“With the far-reaching reform, we are drawing conclusions from the experience of damage cases in the recent past.

The Greensill case marks a turning point here. "

Deposit insurance: Lessons learned from the bankruptcy of Greensill Bank

The Greensill Bank AG had lured in low interest rates with comparatively high savings rates on overnight and fixed-term deposits. The financial supervisory authority Bafin closed the institute for customer traffic at the beginning of March 2021, on March 16 the Bremen District Court opened the insolvency proceedings. The Bremen public prosecutor's office started investigations into suspected falsification of accounts.

After the Greensill bankruptcy, the BdB paid almost three billion euros in compensation to private investors.

However, a number of municipalities are worried about millions because they have not been covered by the voluntary deposit protection fund since 2017.

From 2023 on, professional depositors such as insurance companies, investment companies and public corporations and institutions are also excluded from the pot that private banks have filled in addition to the statutory deposit insurance for emergencies.

(dpa)

Source: merkur

All news articles on 2021-12-22

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