Deposit protection schemes in the member countries of the Basel Committee

Introduction

The Basle Committee has not issued recommendations as to whether or not countries should have deposit protection arrangements or how these should be structured. This is partly because of institutional differences between its members but also because the principal focus of its work has been to create the conditions in which deposit protection is less likely to be needed. Nonetheless, for mutual information, the Committee has on occasions conducted surveys of the arrangements in force in its member countries. A synopsis of the current arrangements is provided below.

Several of the European schemes are currently under review to bring them into line with the EU's Directive on deposit guarantee schemes of May 1994. The main changes occasioned by this Directive are some standardisation in terms of the minimum amount of protection (i.e. ECU 20,000, i.e. 90% of ECU 22,222) and a requirement for deposits with branches (but not subsidiaries) of EU banks to be covered by the home country scheme. Consequently, branches of EU banks will normally be exempted from host-country arrangements, though supplementary cover may be available if the guarantee in the home country provides less cover ("topping-up"). Conversely, for competitive reasons, protection by the home country scheme is limited to the ceiling of the host country scheme if the former provides more cover.