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Statistical Appendix
Depositor Protection Schemes Explicitly Defined: Membership and Nature of the Deposit Insurance System
The format for the establishment of a system of deposit insurance has been adopted by six central African countries that share a central bank (Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon). The treaty that embodies the system has been ratified by Cameroon and Chad. Ratification is pending elsewhere. The scheme will not go into operation until all regional members have ratified the treaty.
Japan has two systems. The first covers, commercial and shinkin banks, which are credit cooperatives, and labor and credit associations but the authorities have extended a temporary full guarantee. The second scheme covers agricultural and fishery cooperatives.
Korea has placed a temporary full guarantee on deposits.
Two U.S. banks in the Marshall Islands are insured by the United Sates’ FDIC under special U.S. legislation, but the domestic bank is not covered.
Banks in Micronesia are insured by the United States’FDIC under special U.S. legislation.
Finland has a relatively new system that replaces its comprehensive guarantee.
France has separate schemes for commercial banks and for mutual, savings and cooperative banks.
Germany has both public and private schemes. There are separate private schemes for commercial banks, savings banks, giro institutions, and credit cooperatives. Since August 1998 there has been in place an official compulsory scheme for commercial banks. The private scheme supplements the public deposit insurance system by covering the 10 percent deductible and topping up coverage. The private deposit insurance system can assist troubled banks.
Until January 2000, Iceland had two schemes for deposit protection-one for commercial banks and the other for savings banks. Both are monitored by the supervisory agency. The two schemes have now been merged.
Italy has two separate schemes, one for commercial banks (that have 90 percent of the system’s deposits) and the other for smaller, mutual institutions.
Norway has two separate deposit insurance funds-one for commercial banks and the other for savings banks..
Poland has three separate schemes.
There are three separate systems in Spain: one for commercial banks, a second for savings banks, and the third for credit cooperatives. They are similar in composition
Before its banking crisis, Sweden did not have a system of depositor protection. It introduced a temporary guarantee of all bank liabilities in 1992, and replaced it with a formal system of deposit insurance to conform to EU standards in January 1996 for all banks and investment firms that receive deposits
Turkey explicitly insures savings deposits and CDs, but in 1994, it extended an implicit guarantee to all deposits.
The legislation setting up the deposit insurance system in Morocco was enacted in 1993; however, the Ministry of Finance was required to approve the by-laws and did not do so until 1996.
In Chile, the central bank guarantees demand deposits. The government guarantees 90 percent of household savings and time deposits to a limit of UF 120 per person per year, that is, 120 inflation-adjusted units of Chilean currency
Article 4 of the Banking Law in Costa Rica states that state-owned banks can count on a guarantee from the government. The public has interpreted this article as providing unlimited deposit protection at state-owned banks.
The Dominican Republic currently has explicit deposit insurance only for savings and loan associations and the National Housing Bank. A law giving wider deposit protection in the form of legal priority passed the legislature in 1999, but was vetoed by the President
A deposit insurance system was enacted in Ecuador in July 1998, but was temporarily over-ridden by a full guarantee that was placed in December 1998. However, deposits were frozen in March 1999 and will be repaid mostly in government bonds as dollarization precludes creating new money.
El Salvador is implementing a new deposit insurance system that covers most deposits.
Jamaica instituted an explicit full guarantee in 1995. A limited deposit insurance system was enacted in March 1998 and began operations in September 1998.
Mexico did not impose an obligation on its insurance agency (FOBAPROA) to guarantee deposits, but each December, the agency announced what instruments it would cover. For example, in 1997, it stated that it would cover all liabilities of commercial banks except subordinated debt. A new law was passed in 1998 under which a new agency, IPAB, insures deposits. The full guarantee is being phased out-a process to be completed by year 2005.
The system in Peru was granted a broad role in the revised legislation of 1999.
The United States has three separate schemes: one for commercial banks, a second for savings associations, and a third for credit unions. Deposits booked offshore are not covered.
Deposit insurance in the United States is compulsory for nationally chartered banks, for state-chartered banks that are members of the Federal Reserve System and for other banks where their state charters require it. In short, federal insurance is compulsory for virtually all bank and thrifts.
The numbers of compulsory and voluntary schemes exceed the total of 68 because Germany has both public and private schemes that are characterized differently.
Depositor Protection Schemes Explicitly Defined: Membership and Nature of the Deposit Insurance System
| Region, Country or Province | Membership | Responsibilities of the System (broad or narrow) | ||
|---|---|---|---|---|
| Date enacted/revised | Compulsory | Voluntary | ||
| AFRICA | ||||
| Cameroon 1 | 1999 | X | Narrow. | |
| Central African Republic1 | X | Narrow. | ||
| Chad 1 | 2000 | X | Narrow. | |
| Congo, Republic 1 | X | Narrow. | ||
| Equatorial Guinea1 | X | Narrow. | ||
| Gabon1 | X | Narrow. | ||
| kenya | 1985 | X | Broad. | |
| Nigeria | 1988/89 | X | Broad. | |
| Tanzania | 1994 | X | Broad. | |
| Uganda | 1994 | X | Narrow. | |
| Zambia | Proposed, but not implemented. | |||
| ASIA | ||||
| Bangladesh | 1984/2000 pending. | X | Narrow. | |
| Hong Kong SAR | Hong Kong considered and rejected installing a deposit insurance system in 1992; but is currently reconsidering. | |||
| India | 1961 | X | Narrow, considering broadening | |
| Japan 2 | 1971 (in full since 1995/96) | X | Broad. | |
| Indonesia | 1998 (A full, explicit guarantee was introduced in 1998). | |||
| Kazakhstan | 1999 | X | Narrow, | |
| Korea 3 | 1996 (currently in full) | X | Broad | |
| Malaysia | A full guarantee was introduced in December 1997. | |||
| Marshall Islands 4 | 1975 | X | Broad. | |
| Micronesia 5 | 1963 | X | Broad. | |
| Philippines | 1963 | X | Broad. | |
| Sri Lanka | 1987 | X | Narrow. | |
| Thailand | In full since 1997. but a draft law is under consideration to replace the full guarantee. | |||
| Taiwan Province of China | 1985/95/99 | X (since 2/99) | Broad. | |
| EUROPE | ||||
| Albania | Under consideration. | |||
| Austria | 1979/96 | X | Narrow. | |
| Belgium | 1974/95 | X | Broad. | |
| Bulgaria | 1998 | X | Narrow (is considering broadening). | |
| Croatia | 1997/99 | X | Broad. | |
| Czech Republic | 1994 | X | Narrow | |
| Denmark | 1988/98 | X | Narrow. | |
| Estonia | 1998 | X | Narrow | |
| Finland 6 | 1969/92/98 | X | Narrow. | |
| France 7 | 1980/95/99 | X | Narrow. | |
| Germany 8 | 1966/76/98 | X (official) | X (private) | Narrow. |
| Gibraltar | 1998 | X | Narrow. | |
| Greece | 1993/95 | X | Narrow. | |
| Hungary | 1993 | X | Broad. | |
| Iceland 9 | 1985/96/2000 | X | Narrow. | |
| Ireland | 1989/95 | X | Broad. | |
| Italy 10 | 1987/96/99 | X | Broad. | |
| Latvia | 1998 | X | Narrow. | |
| Lithuania | 1996 | X | Narrow. | |
| Luxembourg | 1989/99 | X | Narrow | |
| Macedonia | 1996/97/98/00 | X | Narrow. | |
| Netherlands | 1979/95 | X | Narrow. | |
| Norway 11 | 1961/97 | X | Broad. | |
| Poland 12 | 1995 | X | Broad. | |
| Portugal | 1992/95 | X | Narrow. | |
| Romania | 1996 | X | Narrow. | |
| Russia | A draft law was passed by the Parliament but vetoed by the President in 2000. There is an implicit guarantee of household deposits in the savings bank. | |||
| Slovak Republic | 1996 | X | Narrow. | |
| Spain13 | 1977/96 | X | Broad. | |
| Sweden14 | 1996 | X | Narrow. | |
| Switzerland | 1984/93 | X | Narrow. | |
| Turkey 15 | 1983 (in full since December 1999). | X | Narrow. | |
| Ukraine | 1998 | X | Narrow. | |
| United Kingdom | 1982/95 | X | Narrow. | |
| MIDDLE EAST | ||||
| Bahrain | 1993 | X | Narrow. | |
| Israel | Implicit-the central bank has compensated all depositors in full for the last 30 years. | |||
| Kuwait | Implicit: Kuwait is beginning to consider a formal scheme. | |||
| Lebanon | 1967/91 | X | Narrow. | |
| Morocco Oman | 1993/96 16 | X | Broad. | |
| Oman | 1995 | X | Broad. | |
| WESTERN HEMISPHERE | ||||
| Argentina | 1971/95 | X | Broad in principle. | |
| Bahamas | 1999 | X | Broad. | |
| Bolivia | Deposit insurance system proposed in 1999 but not yet enacted. | |||
| Brazil | 1974/81/95 | X (de facto) | Narrow. | |
| Canada | 1967/95 | X | Broad. | |
| Chile 17 | 1986 | X | Broad. | |
| Colombia | 1985 | X | Broad since 1998. | |
| Costa Rica 18 | There is an explicit full guarantee, but only for state-owned banks. An explicit, limited scheme is under discussion for both state-owned and private banks. | |||
| Dominican Republic 19 | 1962/99 | X | Narrow. | |
| Ecuador | July 1998. In full December 1998.20 | X | Broad. | |
| El Salvador 21 | 1991/2000 | X | Broad. | |
| Guatemala | 1999 | X | Narrow. | |
| Honduras | 1999/2000 (in full until 2002). | X | Broad. | |
| Jamaica 22 | 1998 (full from 1997 to 1998). | X | Broad. | |
| Mexico 23 | 1986/90/99 (full: beginning to be phased out). | X | Broad. | |
| Panama | Has explicit coverage only for credit. | |||
| Peru | 1992/99 | X | Broad.24 | |
| Trinidad & Tobago | 1986 | X | Broad. | |
| United States 25 | 1934/91. | X 26 | Broad. | |
| Venezuela | 1985 | X | Broad. | |
| Number of Countries Examined: 85 | 72 countries offer an explicit deposit insurance system; the guarantee is in full in 11 countries. | 62 Schemes27 | 7 Schemes27 | Narrow role in 34 countries; Broad responsibilities in 33 systems. |
The format for the establishment of a system of deposit insurance has been adopted by six central African countries that share a central bank (Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon). The treaty that embodies the system has been ratified by Cameroon and Chad. Ratification is pending elsewhere. The scheme will not go into operation until all regional members have ratified the treaty.
Japan has two systems. The first covers, commercial and shinkin banks, which are credit cooperatives, and labor and credit associations but the authorities have extended a temporary full guarantee. The second scheme covers agricultural and fishery cooperatives.
Korea has placed a temporary full guarantee on deposits.
Two U.S. banks in the Marshall Islands are insured by the United Sates’ FDIC under special U.S. legislation, but the domestic bank is not covered.
Banks in Micronesia are insured by the United States’FDIC under special U.S. legislation.
Finland has a relatively new system that replaces its comprehensive guarantee.
France has separate schemes for commercial banks and for mutual, savings and cooperative banks.
Germany has both public and private schemes. There are separate private schemes for commercial banks, savings banks, giro institutions, and credit cooperatives. Since August 1998 there has been in place an official compulsory scheme for commercial banks. The private scheme supplements the public deposit insurance system by covering the 10 percent deductible and topping up coverage. The private deposit insurance system can assist troubled banks.
Until January 2000, Iceland had two schemes for deposit protection-one for commercial banks and the other for savings banks. Both are monitored by the supervisory agency. The two schemes have now been merged.
Italy has two separate schemes, one for commercial banks (that have 90 percent of the system’s deposits) and the other for smaller, mutual institutions.
Norway has two separate deposit insurance funds-one for commercial banks and the other for savings banks..
Poland has three separate schemes.
There are three separate systems in Spain: one for commercial banks, a second for savings banks, and the third for credit cooperatives. They are similar in composition
Before its banking crisis, Sweden did not have a system of depositor protection. It introduced a temporary guarantee of all bank liabilities in 1992, and replaced it with a formal system of deposit insurance to conform to EU standards in January 1996 for all banks and investment firms that receive deposits
Turkey explicitly insures savings deposits and CDs, but in 1994, it extended an implicit guarantee to all deposits.
The legislation setting up the deposit insurance system in Morocco was enacted in 1993; however, the Ministry of Finance was required to approve the by-laws and did not do so until 1996.
In Chile, the central bank guarantees demand deposits. The government guarantees 90 percent of household savings and time deposits to a limit of UF 120 per person per year, that is, 120 inflation-adjusted units of Chilean currency
Article 4 of the Banking Law in Costa Rica states that state-owned banks can count on a guarantee from the government. The public has interpreted this article as providing unlimited deposit protection at state-owned banks.
The Dominican Republic currently has explicit deposit insurance only for savings and loan associations and the National Housing Bank. A law giving wider deposit protection in the form of legal priority passed the legislature in 1999, but was vetoed by the President
A deposit insurance system was enacted in Ecuador in July 1998, but was temporarily over-ridden by a full guarantee that was placed in December 1998. However, deposits were frozen in March 1999 and will be repaid mostly in government bonds as dollarization precludes creating new money.
El Salvador is implementing a new deposit insurance system that covers most deposits.
Jamaica instituted an explicit full guarantee in 1995. A limited deposit insurance system was enacted in March 1998 and began operations in September 1998.
Mexico did not impose an obligation on its insurance agency (FOBAPROA) to guarantee deposits, but each December, the agency announced what instruments it would cover. For example, in 1997, it stated that it would cover all liabilities of commercial banks except subordinated debt. A new law was passed in 1998 under which a new agency, IPAB, insures deposits. The full guarantee is being phased out-a process to be completed by year 2005.
The system in Peru was granted a broad role in the revised legislation of 1999.
The United States has three separate schemes: one for commercial banks, a second for savings associations, and a third for credit unions. Deposits booked offshore are not covered.
Deposit insurance in the United States is compulsory for nationally chartered banks, for state-chartered banks that are members of the Federal Reserve System and for other banks where their state charters require it. In short, federal insurance is compulsory for virtually all bank and thrifts.
The numbers of compulsory and voluntary schemes exceed the total of 68 because Germany has both public and private schemes that are characterized differently.
Depositor Protection Schemes Explicitly Defined: Membership and Nature of the Deposit Insurance System
| Region, Country or Province | Membership | Responsibilities of the System (broad or narrow) | ||
|---|---|---|---|---|
| Date enacted/revised | Compulsory | Voluntary | ||
| AFRICA | ||||
| Cameroon 1 | 1999 | X | Narrow. | |
| Central African Republic1 | X | Narrow. | ||
| Chad 1 | 2000 | X | Narrow. | |
| Congo, Republic 1 | X | Narrow. | ||
| Equatorial Guinea1 | X | Narrow. | ||
| Gabon1 | X | Narrow. | ||
| kenya | 1985 | X | Broad. | |
| Nigeria | 1988/89 | X | Broad. | |
| Tanzania | 1994 | X | Broad. | |
| Uganda | 1994 | X | Narrow. | |
| Zambia | Proposed, but not implemented. | |||
| ASIA | ||||
| Bangladesh | 1984/2000 pending. | X | Narrow. | |
| Hong Kong SAR | Hong Kong considered and rejected installing a deposit insurance system in 1992; but is currently reconsidering. | |||
| India | 1961 | X | Narrow, considering broadening | |
| Japan 2 | 1971 (in full since 1995/96) | X | Broad. | |
| Indonesia | 1998 (A full, explicit guarantee was introduced in 1998). | |||
| Kazakhstan | 1999 | X | Narrow, | |
| Korea 3 | 1996 (currently in full) | X | Broad | |
| Malaysia | A full guarantee was introduced in December 1997. | |||
| Marshall Islands 4 | 1975 | X | Broad. | |
| Micronesia 5 | 1963 | X | Broad. | |
| Philippines | 1963 | X | Broad. | |
| Sri Lanka | 1987 | X | Narrow. | |
| Thailand | In full since 1997. but a draft law is under consideration to replace the full guarantee. | |||
| Taiwan Province of China | 1985/95/99 | X (since 2/99) | Broad. | |
| EUROPE | ||||
| Albania | Under consideration. | |||
| Austria | 1979/96 | X | Narrow. | |
| Belgium | 1974/95 | X | Broad. | |
| Bulgaria | 1998 | X | Narrow (is considering broadening). | |
| Croatia | 1997/99 | X | Broad. | |
| Czech Republic | 1994 | X | Narrow | |
| Denmark | 1988/98 | X | Narrow. | |
| Estonia | 1998 | X | Narrow | |
| Finland 6 | 1969/92/98 | X | Narrow. | |
| France 7 | 1980/95/99 | X | Narrow. | |
| Germany 8 | 1966/76/98 | X (official) | X (private) | Narrow. |
| Gibraltar | 1998 | X | Narrow. | |
| Greece | 1993/95 | X | Narrow. | |
| Hungary | 1993 | X | Broad. | |
| Iceland 9 | 1985/96/2000 | X | Narrow. | |
| Ireland | 1989/95 | X | Broad. | |
| Italy 10 | 1987/96/99 | X | Broad. | |
| Latvia | 1998 | X | Narrow. | |
| Lithuania | 1996 | X | Narrow. | |
| Luxembourg | 1989/99 | X | Narrow | |
| Macedonia | 1996/97/98/00 | X | Narrow. | |
| Netherlands | 1979/95 | X | Narrow. | |
| Norway 11 | 1961/97 | X | Broad. | |
| Poland 12 | 1995 | X | Broad. | |
| Portugal | 1992/95 | X | Narrow. | |
| Romania | 1996 | X | Narrow. | |
| Russia | A draft law was passed by the Parliament but vetoed by the President in 2000. There is an implicit guarantee of household deposits in the savings bank. | |||
| Slovak Republic | 1996 | X | Narrow. | |
| Spain13 | 1977/96 | X | Broad. | |
| Sweden14 | 1996 | X | Narrow. | |
| Switzerland | 1984/93 | X | Narrow. | |
| Turkey 15 | 1983 (in full since December 1999). | X | Narrow. | |
| Ukraine | 1998 | X | Narrow. | |
| United Kingdom | 1982/95 | X | Narrow. | |
| MIDDLE EAST | ||||
| Bahrain | 1993 | X | Narrow. | |
| Israel | Implicit-the central bank has compensated all depositors in full for the last 30 years. | |||
| Kuwait | Implicit: Kuwait is beginning to consider a formal scheme. | |||
| Lebanon | 1967/91 | X | Narrow. | |
| Morocco Oman | 1993/96 16 | X | Broad. | |
| Oman | 1995 | X | Broad. | |
| WESTERN HEMISPHERE | ||||
| Argentina | 1971/95 | X | Broad in principle. | |
| Bahamas | 1999 | X | Broad. | |
| Bolivia | Deposit insurance system proposed in 1999 but not yet enacted. | |||
| Brazil | 1974/81/95 | X (de facto) | Narrow. | |
| Canada | 1967/95 | X | Broad. | |
| Chile 17 | 1986 | X | Broad. | |
| Colombia | 1985 | X | Broad since 1998. | |
| Costa Rica 18 | There is an explicit full guarantee, but only for state-owned banks. An explicit, limited scheme is under discussion for both state-owned and private banks. | |||
| Dominican Republic 19 | 1962/99 | X | Narrow. | |
| Ecuador | July 1998. In full December 1998.20 | X | Broad. | |
| El Salvador 21 | 1991/2000 | X | Broad. | |
| Guatemala | 1999 | X | Narrow. | |
| Honduras | 1999/2000 (in full until 2002). | X | Broad. | |
| Jamaica 22 | 1998 (full from 1997 to 1998). | X | Broad. | |
| Mexico 23 | 1986/90/99 (full: beginning to be phased out). | X | Broad. | |
| Panama | Has explicit coverage only for credit. | |||
| Peru | 1992/99 | X | Broad.24 | |
| Trinidad & Tobago | 1986 | X | Broad. | |
| United States 25 | 1934/91. | X 26 | Broad. | |
| Venezuela | 1985 | X | Broad. | |
| Number of Countries Examined: 85 | 72 countries offer an explicit deposit insurance system; the guarantee is in full in 11 countries. | 62 Schemes27 | 7 Schemes27 | Narrow role in 34 countries; Broad responsibilities in 33 systems. |
The format for the establishment of a system of deposit insurance has been adopted by six central African countries that share a central bank (Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon). The treaty that embodies the system has been ratified by Cameroon and Chad. Ratification is pending elsewhere. The scheme will not go into operation until all regional members have ratified the treaty.
Japan has two systems. The first covers, commercial and shinkin banks, which are credit cooperatives, and labor and credit associations but the authorities have extended a temporary full guarantee. The second scheme covers agricultural and fishery cooperatives.
Korea has placed a temporary full guarantee on deposits.
Two U.S. banks in the Marshall Islands are insured by the United Sates’ FDIC under special U.S. legislation, but the domestic bank is not covered.
Banks in Micronesia are insured by the United States’FDIC under special U.S. legislation.
Finland has a relatively new system that replaces its comprehensive guarantee.
France has separate schemes for commercial banks and for mutual, savings and cooperative banks.
Germany has both public and private schemes. There are separate private schemes for commercial banks, savings banks, giro institutions, and credit cooperatives. Since August 1998 there has been in place an official compulsory scheme for commercial banks. The private scheme supplements the public deposit insurance system by covering the 10 percent deductible and topping up coverage. The private deposit insurance system can assist troubled banks.
Until January 2000, Iceland had two schemes for deposit protection-one for commercial banks and the other for savings banks. Both are monitored by the supervisory agency. The two schemes have now been merged.
Italy has two separate schemes, one for commercial banks (that have 90 percent of the system’s deposits) and the other for smaller, mutual institutions.
Norway has two separate deposit insurance funds-one for commercial banks and the other for savings banks..
Poland has three separate schemes.
There are three separate systems in Spain: one for commercial banks, a second for savings banks, and the third for credit cooperatives. They are similar in composition
Before its banking crisis, Sweden did not have a system of depositor protection. It introduced a temporary guarantee of all bank liabilities in 1992, and replaced it with a formal system of deposit insurance to conform to EU standards in January 1996 for all banks and investment firms that receive deposits
Turkey explicitly insures savings deposits and CDs, but in 1994, it extended an implicit guarantee to all deposits.
The legislation setting up the deposit insurance system in Morocco was enacted in 1993; however, the Ministry of Finance was required to approve the by-laws and did not do so until 1996.
In Chile, the central bank guarantees demand deposits. The government guarantees 90 percent of household savings and time deposits to a limit of UF 120 per person per year, that is, 120 inflation-adjusted units of Chilean currency
Article 4 of the Banking Law in Costa Rica states that state-owned banks can count on a guarantee from the government. The public has interpreted this article as providing unlimited deposit protection at state-owned banks.
The Dominican Republic currently has explicit deposit insurance only for savings and loan associations and the National Housing Bank. A law giving wider deposit protection in the form of legal priority passed the legislature in 1999, but was vetoed by the President
A deposit insurance system was enacted in Ecuador in July 1998, but was temporarily over-ridden by a full guarantee that was placed in December 1998. However, deposits were frozen in March 1999 and will be repaid mostly in government bonds as dollarization precludes creating new money.
El Salvador is implementing a new deposit insurance system that covers most deposits.
Jamaica instituted an explicit full guarantee in 1995. A limited deposit insurance system was enacted in March 1998 and began operations in September 1998.
Mexico did not impose an obligation on its insurance agency (FOBAPROA) to guarantee deposits, but each December, the agency announced what instruments it would cover. For example, in 1997, it stated that it would cover all liabilities of commercial banks except subordinated debt. A new law was passed in 1998 under which a new agency, IPAB, insures deposits. The full guarantee is being phased out-a process to be completed by year 2005.
The system in Peru was granted a broad role in the revised legislation of 1999.
The United States has three separate schemes: one for commercial banks, a second for savings associations, and a third for credit unions. Deposits booked offshore are not covered.
Deposit insurance in the United States is compulsory for nationally chartered banks, for state-chartered banks that are members of the Federal Reserve System and for other banks where their state charters require it. In short, federal insurance is compulsory for virtually all bank and thrifts.
The numbers of compulsory and voluntary schemes exceed the total of 68 because Germany has both public and private schemes that are characterized differently.
Membership in Explicit Limited Deposit Insurance Systems
Excluding the scheme for credit cooperatives in Panama.
Countries in the EEA are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, and the United Kingdom.
In Argentina in 2000, only commercial banks are covered because other banks are excluded because they pay excessively high rates on their deposits.
Membership in Explicit Limited Deposit Insurance Systems
| Region, Country or Province | Institutional Membership | Participation by the Branches of Foreign Banks | Cover for Domestic Banks’ Branches Abroad |
|---|---|---|---|
| AFRICA | |||
| Kenya | … | Voluntary. | Voluntary. |
| Nigeria | Licensed banks. | ||
| Tanzania | All licensed banks, including the Tanzania Postal Bank, and financial institutions that take deposits | Yes. | |
| Uganda | Commercial banks. | ||
| ASIA | |||
| Bangladesh | All scheduled private, foreign, and Islamic financial institutions. | Yes. | |
| India | Commercial, cooperative and rural banks that are either publicly or privately owned. | Yes. | No. |
| Japan | Commercial, trust, long-term credit and shinkin banks, credit cooperatives, labor and credit associations. A separate scheme covers agricultural and credit cooperatives. Government-related institutions and branches of foreign banks are not covered. | No. | Not normally. |
| Kazakhstan | Banks licensed to accept deposits and that have met international prudential standards | Yes. | |
| Korea | Under full coverage: national and regional commercial banks, specialized banks, the Korea Development and Long-term Credit Banks, and branches of foreign banks. | Yes. | Yes. |
| Marshall Is. | Branches of U.S. commercial banks. | Yes. | |
| Micronesia | Commercial banks. | Yes | |
| Philippines | All institutions granted a banking license. | Yes. | |
| Sri Lanka | Registered banking institutions and cooperative societies carrying on banking business. A new. separate, cross-guarantee, scheme for cooperative societies was initiated in 1999 | Voluntary. | |
| Taiwan Province of China | All financial institutions licensed to accept deposits or trust funds. | Compulsory, unless covered equivalently by a home-country deposit insurance system. | |
| EUROPE | |||
| Austria | Credit institutions that take deposits. | Compulsory for non-EU banks. EU banks may opt to “top up.” | Yes, for EU members. |
| Belgium | Licensed credit institutions | Compulsory (unless the home country has an equivalent scheme). | Yes (unless the host country has an equivalent scheme). |
| Bulgaria | All banks legally licensed to take deposits. | Compulsory (unless the home country has an equivalent scheme). | No. |
| Croatia | Commercial and savings banks, but not savings and loan associations | Compulsory (unless the home country has an equivalent scheme). | No. |
| Czech Republic | All licensed banks and the branches and agencies of foreign banks. | Yes. | No. |
| Denmark | Commercial, savings and cooperative banks and the branches of foreign banks. | Compulsory for banks from non-EU countries unless they have comparable coverage, then voluntary. | Yes. |
| Estonia | Credit institutions. | Yes, unless covered by a comparable scheme from home. | No |
| Finland | Voluntary | No. | |
| France | All licensed credit institutions since July 1999. (There had previously been a separate scheme for mutual, savings and cooperative banks.) | Compulsory. | Yes (but only for EEA countries). |
| Germany | The official deposit insurance system covers all licensed banking institutions. There are also separate private schemes for commercial banks, savings banks and credit cooperatives. | Voluntary (although all branches in fact participate in the scheme). | Yes: for German banks operating in EU countries. The private sector covers all branches. |
| Gibraltar | Banks incorporated in Gibraltar, offices from banks from non-EEA countries that are authorized to operate in Gibraltar.1 | Voluntary for EU banks to “bottom up” coverage. Compulsory for non-EU banks lacking comparable coverage. | No. |
| Greece | All credit institutions authorized to conduct banking business in Greece except for the Postal Savings Bank, the Deposit and Loan Fund, and credit cooperatives. | Compulsory (unless the home country has an equivalent scheme). | Yes (unless the host country has an equivalent scheme). |
| Hungary | All types of licensed financial institutions, except state-guaranteed institutions and credit cooperatives. | Yes. | |
| Iceland | Until January 2000. Iceland had two separate deposit insurance systems-one for commercial banks and the other for savings banks. They have now been combined. | ||
| Ireland | All authorized credit institutions, including building societies. | Compulsory, except for credit institutions authorized in another EEA country. | No, except within the EEA. |
| Italy | There are two separate deposit insurance systems, one for commercial banks and the other for smaller mutual and cooperative institutions. | Voluntary | Yes, for EU (unless the host country has an equivalent scheme). |
| Latvia | All banks authorized to accept deposits from natural persons. | … | No. |
| Lithuania | Lithuanian commercial banks and state banks where the state holds less than 50% of the shares. | … | No. |
| Luxembourg | All institutions licensed to accept deposits. | Compulsory. | No. |
| Macedonia | Banks and savings houses in Macedonia and branches of foreign banks registered in Macedonia. | Yes, voluntary. | No. |
| Netherlands | All financial institutions licensed to cake deposits. | Compulsory. | No. |
| Norway | There are separate schemes for commercial banks and savings banks. | ||
| Poland | All banks operating in Poland, except for cooperative banks, which have a separate scheme. | Yes. | No. |
| Portugal | Credit institutions that have their head office in Portugal and are authorized to take deposits and branches of non-EU banks. | Compulsory (unless the home country has an equivalent scheme). EU banks may “top up” their home coverage. | No. |
| Romania | |||
| Slovak Republic | Commercial banks and building societies. | ||
| Spain | All Spanish credit institutions included in the Register of Banks. There are three separate schemes: one for commercial banks, one for savings banks, and one for credit cooperatives. | Voluntary. | Yes (only for EEA countries). |
| Sweden | All Swedish and foreign commercial banks and all investment firms that are licensed to accept deposits. | Voluntary for EEA and non-EEA banks (if the home country has an equivalent scheme). | Yes (voluntary for branches in EEA countries and possible with the permission of the deposit insurance system for branches elsewhere. |
| Switzerland | All banks operating in Switzerland, i.e. members of the Swiss Bankers’Association | Yes. | No. |
| Turkey | Normally banks licensed to take household savings deposits. | ||
| Ukraine | Licensed commercial banks that are included in the National Bank of Ukraine’s Register of Banks. The Savings Bank of Ukraine is not a member. | Yes. | No. |
| United Kingdom | Banks licensed to take deposits and incorporated in the United Kingdom. non-EEA incorporated banks that are authorized to take deposits through UK offices, and branches of UK incorporated banks in the EEA, Building societies have a separate scheme | Compulsory for branches on non-EEA banks operating in the UK, unless they can prove they have a comparable home scheme. Voluntary for branches of EEA banks “topping up” cover. | Yes for branches of UK incorporated banks operating in the EEA. |
| MIDDLE EAST | |||
| Bahrain | Bahraini offices of full commercial banks | Yes, unless covered by a similar scheme elsewhere. | yes. |
| Lebanon | All banks existing and operating in Lebanon. | Yes. | Yes. |
| Morocco | “All credit institutions receiving public funds.” | No. | No. |
| Oman | Banks licensed by the central bank to accept deposits and are operating in Oman. | … | No. |
| WESTERN HEMISPHERE | |||
| Argentina | Commercial banks, savings banks, and credit unions, if they are supervised.2 | Yes. | No. |
| Bahamas | Every licensed bank conducting business in Bahamian currency. | Yes | |
| Brazil | Financial institutions, including savings and credit associations that accept deposits, but not credit cooperatives. | Yes. | No. |
| Canada | Domestic banks and subsidiaries, domestic trust and loan companies, foreign bank subsidiaries. | Yes. | No. |
| Chile | Commercial banks and savings banks of all types, but not credit cooperatives. | Yes. | No. |
| Colombia | All entities that take deposits, including banks. Finance companies, savings associations, leasing companies and investment trusts. There is a separate scheme for credit cooperatives. | Yes | No. |
| Dominican Republic | Savings and loan associations and the National Housing Bank. The draft law would extend protection to all banking institutions. | Yes. | No. |
| Ecuador | Commercial banks, savings banks and credit cooperatives that are supervised. | Yes. | Yes. |
| El Salvador | All banks, except two state-owned banks, but not credit cooperatives. | Yes, unless they are insured by the home country. | Yes. |
| Guatemala | Private domestic banks and branches of foreign banks. | Yes. | |
| Honduras | Private banks, savings and loan associations. | Yes. | |
| Jamaica | All financial institutions licensed to accept deposits. | Yes. | No. |
| Mexico | Full service commercial banks, but not savings or credit cooperatives. | ||
| Peru | All commercial banks and certain other financial institutions that are supervised and authorized to accept deposits. | Yes. | No. |
| Trinidad &Tobago | All licensed financial institutions, including commercial banks, finance houses, trust companies, and merchant banks. | Yes. | No. |
| United Scales | Commercial and savings banks are insured by the Bank Insurance Fund. (There are separate funds for savings associations and credit unions.) | No, they have to be subsidiaries. | No (except for US-banks in the Marshall Islands and Micronesia and unless the deposits are payable in the United States). |
| Venezuela | Commercial and other banks that are supervised. | ||
| 67 Countries normally have an explicit, limited DIS* | Typically included are financial institutions licensed to take deposits. | Yes: 40 Voluntary: 8 | No: 30 Yes: within the EEA and 5 other countries. |
Excluding the scheme for credit cooperatives in Panama.
Countries in the EEA are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, and the United Kingdom.
In Argentina in 2000, only commercial banks are covered because other banks are excluded because they pay excessively high rates on their deposits.
Membership in Explicit Limited Deposit Insurance Systems
| Region, Country or Province | Institutional Membership | Participation by the Branches of Foreign Banks | Cover for Domestic Banks’ Branches Abroad |
|---|---|---|---|
| AFRICA | |||
| Kenya | … | Voluntary. | Voluntary. |
| Nigeria | Licensed banks. | ||
| Tanzania | All licensed banks, including the Tanzania Postal Bank, and financial institutions that take deposits | Yes. | |
| Uganda | Commercial banks. | ||
| ASIA | |||
| Bangladesh | All scheduled private, foreign, and Islamic financial institutions. | Yes. | |
| India | Commercial, cooperative and rural banks that are either publicly or privately owned. | Yes. | No. |
| Japan | Commercial, trust, long-term credit and shinkin banks, credit cooperatives, labor and credit associations. A separate scheme covers agricultural and credit cooperatives. Government-related institutions and branches of foreign banks are not covered. | No. | Not normally. |
| Kazakhstan | Banks licensed to accept deposits and that have met international prudential standards | Yes. | |
| Korea | Under full coverage: national and regional commercial banks, specialized banks, the Korea Development and Long-term Credit Banks, and branches of foreign banks. | Yes. | Yes. |
| Marshall Is. | Branches of U.S. commercial banks. | Yes. | |
| Micronesia | Commercial banks. | Yes | |
| Philippines | All institutions granted a banking license. | Yes. | |
| Sri Lanka | Registered banking institutions and cooperative societies carrying on banking business. A new. separate, cross-guarantee, scheme for cooperative societies was initiated in 1999 | Voluntary. | |
| Taiwan Province of China | All financial institutions licensed to accept deposits or trust funds. | Compulsory, unless covered equivalently by a home-country deposit insurance system. | |
| EUROPE | |||
| Austria | Credit institutions that take deposits. | Compulsory for non-EU banks. EU banks may opt to “top up.” | Yes, for EU members. |
| Belgium | Licensed credit institutions | Compulsory (unless the home country has an equivalent scheme). | Yes (unless the host country has an equivalent scheme). |
| Bulgaria | All banks legally licensed to take deposits. | Compulsory (unless the home country has an equivalent scheme). | No. |
| Croatia | Commercial and savings banks, but not savings and loan associations | Compulsory (unless the home country has an equivalent scheme). | No. |
| Czech Republic | All licensed banks and the branches and agencies of foreign banks. | Yes. | No. |
| Denmark | Commercial, savings and cooperative banks and the branches of foreign banks. | Compulsory for banks from non-EU countries unless they have comparable coverage, then voluntary. | Yes. |
| Estonia | Credit institutions. | Yes, unless covered by a comparable scheme from home. | No |
| Finland | Voluntary | No. | |
| France | All licensed credit institutions since July 1999. (There had previously been a separate scheme for mutual, savings and cooperative banks.) | Compulsory. | Yes (but only for EEA countries). |
| Germany | The official deposit insurance system covers all licensed banking institutions. There are also separate private schemes for commercial banks, savings banks and credit cooperatives. | Voluntary (although all branches in fact participate in the scheme). | Yes: for German banks operating in EU countries. The private sector covers all branches. |
| Gibraltar | Banks incorporated in Gibraltar, offices from banks from non-EEA countries that are authorized to operate in Gibraltar.1 | Voluntary for EU banks to “bottom up” coverage. Compulsory for non-EU banks lacking comparable coverage. | No. |
| Greece | All credit institutions authorized to conduct banking business in Greece except for the Postal Savings Bank, the Deposit and Loan Fund, and credit cooperatives. | Compulsory (unless the home country has an equivalent scheme). | Yes (unless the host country has an equivalent scheme). |
| Hungary | All types of licensed financial institutions, except state-guaranteed institutions and credit cooperatives. | Yes. | |
| Iceland | Until January 2000. Iceland had two separate deposit insurance systems-one for commercial banks and the other for savings banks. They have now been combined. | ||
| Ireland | All authorized credit institutions, including building societies. | Compulsory, except for credit institutions authorized in another EEA country. | No, except within the EEA. |
| Italy | There are two separate deposit insurance systems, one for commercial banks and the other for smaller mutual and cooperative institutions. | Voluntary | Yes, for EU (unless the host country has an equivalent scheme). |
| Latvia | All banks authorized to accept deposits from natural persons. | … | No. |
| Lithuania | Lithuanian commercial banks and state banks where the state holds less than 50% of the shares. | … | No. |
| Luxembourg | All institutions licensed to accept deposits. | Compulsory. | No. |
| Macedonia | Banks and savings houses in Macedonia and branches of foreign banks registered in Macedonia. | Yes, voluntary. | No. |
| Netherlands | All financial institutions licensed to cake deposits. | Compulsory. | No. |
| Norway | There are separate schemes for commercial banks and savings banks. | ||
| Poland | All banks operating in Poland, except for cooperative banks, which have a separate scheme. | Yes. | No. |
| Portugal | Credit institutions that have their head office in Portugal and are authorized to take deposits and branches of non-EU banks. | Compulsory (unless the home country has an equivalent scheme). EU banks may “top up” their home coverage. | No. |
| Romania | |||
| Slovak Republic | Commercial banks and building societies. | ||
| Spain | All Spanish credit institutions included in the Register of Banks. There are three separate schemes: one for commercial banks, one for savings banks, and one for credit cooperatives. | Voluntary. | Yes (only for EEA countries). |
| Sweden | All Swedish and foreign commercial banks and all investment firms that are licensed to accept deposits. | Voluntary for EEA and non-EEA banks (if the home country has an equivalent scheme). | Yes (voluntary for branches in EEA countries and possible with the permission of the deposit insurance system for branches elsewhere. |
| Switzerland | All banks operating in Switzerland, i.e. members of the Swiss Bankers’Association | Yes. | No. |
| Turkey | Normally banks licensed to take household savings deposits. | ||
| Ukraine | Licensed commercial banks that are included in the National Bank of Ukraine’s Register of Banks. The Savings Bank of Ukraine is not a member. | Yes. | No. |
| United Kingdom | Banks licensed to take deposits and incorporated in the United Kingdom. non-EEA incorporated banks that are authorized to take deposits through UK offices, and branches of UK incorporated banks in the EEA, Building societies have a separate scheme | Compulsory for branches on non-EEA banks operating in the UK, unless they can prove they have a comparable home scheme. Voluntary for branches of EEA banks “topping up” cover. | Yes for branches of UK incorporated banks operating in the EEA. |
| MIDDLE EAST | |||
| Bahrain | Bahraini offices of full commercial banks | Yes, unless covered by a similar scheme elsewhere. | yes. |
| Lebanon | All banks existing and operating in Lebanon. | Yes. | Yes. |
| Morocco | “All credit institutions receiving public funds.” | No. | No. |
| Oman | Banks licensed by the central bank to accept deposits and are operating in Oman. | … | No. |
| WESTERN HEMISPHERE | |||
| Argentina | Commercial banks, savings banks, and credit unions, if they are supervised.2 | Yes. | No. |
| Bahamas | Every licensed bank conducting business in Bahamian currency. | Yes | |
| Brazil | Financial institutions, including savings and credit associations that accept deposits, but not credit cooperatives. | Yes. | No. |
| Canada | Domestic banks and subsidiaries, domestic trust and loan companies, foreign bank subsidiaries. | Yes. | No. |
| Chile | Commercial banks and savings banks of all types, but not credit cooperatives. | Yes. | No. |
| Colombia | All entities that take deposits, including banks. Finance companies, savings associations, leasing companies and investment trusts. There is a separate scheme for credit cooperatives. | Yes | No. |
| Dominican Republic | Savings and loan associations and the National Housing Bank. The draft law would extend protection to all banking institutions. | Yes. | No. |
| Ecuador | Commercial banks, savings banks and credit cooperatives that are supervised. | Yes. | Yes. |
| El Salvador | All banks, except two state-owned banks, but not credit cooperatives. | Yes, unless they are insured by the home country. | Yes. |
| Guatemala | Private domestic banks and branches of foreign banks. | Yes. | |
| Honduras | Private banks, savings and loan associations. | Yes. | |
| Jamaica | All financial institutions licensed to accept deposits. | Yes. | No. |
| Mexico | Full service commercial banks, but not savings or credit cooperatives. | ||
| Peru | All commercial banks and certain other financial institutions that are supervised and authorized to accept deposits. | Yes. | No. |
| Trinidad &Tobago | All licensed financial institutions, including commercial banks, finance houses, trust companies, and merchant banks. | Yes. | No. |
| United Scales | Commercial and savings banks are insured by the Bank Insurance Fund. (There are separate funds for savings associations and credit unions.) | No, they have to be subsidiaries. | No (except for US-banks in the Marshall Islands and Micronesia and unless the deposits are payable in the United States). |
| Venezuela | Commercial and other banks that are supervised. | ||
| 67 Countries normally have an explicit, limited DIS* | Typically included are financial institutions licensed to take deposits. | Yes: 40 Voluntary: 8 | No: 30 Yes: within the EEA and 5 other countries. |
Excluding the scheme for credit cooperatives in Panama.
Countries in the EEA are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, and the United Kingdom.
In Argentina in 2000, only commercial banks are covered because other banks are excluded because they pay excessively high rates on their deposits.
Private and Official Funding for Explicit Limited Deposit Insurance Systems.
Excluding the scheme for credit cooperatives in Panama.
Funding reflects the ongoing responsibility to contribute to an insurance fund or to pay ex post assessments in order to compensate depositors of a failed bank. Situations where the government has provided initial funding, has an obligation to supply loans, or has borne losses are also indicated in column 3.
The government should be understood to include the central bank in determining official support for funding.
Resources from the government were needed in Lithuania to fund the system, which was expected to be fully funded from bank premiums starting in 1999.
In Poland, foreign banks retain their premiums until they are needed by the deposit insurance system.
The draft law in Bahrain provides for a fund, with contributions to be shared between the government and the banks.
If the fund proves to be insufficient in Morocco, depositor compensation is reduced pro rata.
The law in Canada does not require the CDIC to accumulate a fund. Instead, it puts aside provisions to cover expected future losses and accumulates them in a reserve (typically called an allowance for loan losses (ALL)). Currently, the CDIC has resources that exceed the ALL.
Private and Official Funding for Explicit Limited Deposit Insurance Systems.
| Region, Country or Province | Has Private Funding1 | Has Official Backing2 | Fund or Ex Post Assessment | Investing Fund Resources | Legal Priority for Depositors or the Deposit Insurance System |
|---|---|---|---|---|---|
| AFRICA | |||||
| Kenya | X | Central bank can make loans. | Fund. | No. | |
| Nigeria | X | Government (the ministry of finance and central bank) provided initial capital and can make loans. | Fund. | Mainly Nigerian T-bills. | Yes, de jure. |
| Tanzania | X | The government provided initial capital and the central bank can make loans. | Fund. | Tanzanian T-bills and loans to banks. | No.de jure, at par with other creditors. |
| Uganda | X | Government provided initial capital and will lend. | Fund. | Yes. | |
| ASIA | |||||
| Bangladesh | X | Deposit Insurance agency finances are co-mingled within the central bank. They would be separated under pending legislation and the deposit insurer could borrow from the central bank. | Fund. | Approved, risk-free securities and investments. | Yes. |
| India | X | The central bank provided initial capital. It and government give support with Parliamentary approval. | Fund | Indian central government securities. | No. at par with unsecured creditors. |
| Japan | X | Government and central bank provided initial capital. The central bank makes loans. The government has provided substantial assistance. | Fund. | Central and local government securities and corporate bonds. | No. |
| Kazakhstan | X | The deposit insurance system can borrow from the government and the central bank. | Fund | Government securities. | Yes. |
| Korea | X | The KDIC is legally authorized to borrow from the government or central bank with ministry of finance approval. | Fund. | … | No |
| Marshall Is. | X | Fund. | US government securities | Yes. | |
| Micronesia | X | Fund. | US government securities. | Yes. | |
| Philippines | X | The government provided initial capital, central bank made loans and has borne losses. | Fund. | … | Yes: die PDIC has priority for insured deposits. |
| Sri Lanka | X | The central bank provided initial capital and has advanced funds. | Fund. | … | No. |
| Taiwan Province of China | X | The government provided initial capital. The central bank makes loans against collateral or a guarantee from the ministry of finance. | Fund. | Cash, securities, government bonds, and bank debentures. | No. |
| EUROPE | |||||
| Austria | X | Government-guaranteed bonds may be issued. | Ex post | Not relevant. | Yes: for small depositors. |
| Belgium | X | The state has provided a limited temporary guarantee. | Fund. | … | No. |
| Bulgaria | X | Fund has the left to borrow, including from the government in the last resort, and to receive donations and foreign assistance. | Fund. | … | Yes, for the deposit insurer. |
| Croatia | X | The fund may borrow from the central bank. | Fund. | Short-term government and central bank securities. | Yes, for insured deposits. |
| Czech Republic | X | The central bank and the government would equally make loans to cover any shortfall in funding. | Fund. | … | No. |
| Denmark | X | The deposit insurer can borrow from banks with a guarantee from the government. | Fund. | … | No. |
| Estonia | X | The government made an initial contribution The fund can borrow without a government guarantee or ask the government to borrow a limited amount on its behalf. | Fund. | OECD-country bonds, deposits of non-member credit institutions. | No. |
| Finland | X | The government and the central bank have borne losses. The fund can borrow with a government guarantee. | Fund. | No. | |
| France | X | The Government re-capitalized Credit Lyonnais outside the deposit insurance system. Both the old and the new deposit insurance systems are funded solely from private sources. | Fund beginning in 1999. | … | No. |
| Germany | X | Local governments have supported the scheme for savings institutions. Other schemes can borrow, but the law requires that compensation under the public scheme be paid from members’ annual supplementary contributions. | Fund (ex post for one private system). | … | No. |
| Gibraltar | X | None, | Ex post (fund for admin, expenses). | Not relevant. | No. |
| Greece | X | Sixty percent of the start-up funding was provided by the central bank. | Fund. | 80% in members’ CDs.20% government paper. | |
| Hungary | X | The government will guarantee fund borrowing from the central bank or private markets if requested. | Fund. | Hungarian government bonds, credit institution deposits. | Yes, for private persons’ deposits. |
| Iceland 5 | X | No support. | Fund. | … | No. |
| Ireland | X | … | Fund, | … | No. |
| Italy | X | Under the Legge Decree, the Bank of Italy can make low-interest rate loans to facilitate a large pay-out. The government has recently provided substantial financial assistance to the deposit insurance system. | Only for admin, expenses (thinking of changing). | Not relevant. | Yes: insurer has priority for insured deposits. |
| Latvia | X | The Bank of Latvia and the government made initial contributions. Compensation is paid from the government’s budget if fund resources are inadequate. | Fund. | Latvian government securities. | Yes, de jure. |
| Lithuania | X | The government provided initial capital and will cover any shortfall with loans.3 | Fund. | … | Yes, for insured deposits. |
| Luxembourg | X | … | Ex post | Not relevant. | … |
| Macedonia | X | The central bank can extend credit if the fund lacks resources to pay insured depositors. | Fund. | Securities issued by the central bank. | Yes, for insured deposits. |
| Netherlands | X | The central bank provides interest-free bridge financing. | Ex post | Not relevant. | No. |
| Norway | X | Government and central bank have borne losses. The government created a Government Bank Insurance Fund to make loans to the Commercial Bank and the Savings Bank Guarantee Funds, whose resources had been depleted by the banking crisis. | Fund. | … | Yes, if the bank is under public administration. |
| Poland | X | The Bank of Poland and the government contributed initial capital. | Fund. | Assistance loans CO banks and government securities.4 | Yes: the insurer has priority. |
| Portugal | X | The Bank of Portugal provided initial capital. | Fund. | Assets agreed with the central bank. | No |
| Romania | X | The fund can borrow from the state, the central bank, and other sources. The government can guarantee the debt. | Fund. | Romanian T-bills. | No |
| Slovak Republic | X | The central bank made an initial contribution and may make loans. | Fund. | … | No. |
| Spain | X | The central bank can make limited loans. | Fund. | Interest-bearing account at the National Debt Office. | No. |
| Sweden | X | The government has borne losses. The deposit insurer may borrow from the National Debt Office. | Fund. | … | No. |
| Switzerland | X | No, The Swiss Banker’s Association borrows under normal market conditions. | Ex post. | Not relevant. | Yes, for insured depositors. |
| Turkey | X | Credit may be extended by the central bank in case of insufficiency in funding. | Fund. | In banks to obtain high yields. | Yes, de jure |
| Ukraine | X | The government made an initial contribution through the National Bank of the Ukraine. The deposit insurer can borrow from the government | Fund. | Ukrainian government securities. | Yes, for the deposit insurer. |
| United Kingdom | X | The central bank made loans in the past but there is now no public funding for the deposit insurance system, but it may borrow limited amounts in the markets with Treasury approval. | Small fund (£5m to £6m) mainly ex post | Yes, the deposit insurance agency has priority in recoveries | Treasury bills for the small fund. |
| MIDDLE EAST | |||||
| Bahrain | X | The new law would allow the deposit insurance system to borrow from the markets or the central bank. | ex post, currently.5 | Not relevant. | No |
| Lebanon | X | The central bank contributed half of the deposit insurance system’s initial capital. The government matches banks’ annual contributions. If the fund is depleted the central bank replenishes it by making interest-free loans. | Fund. | Lebanese T-bills, bonds and real estate in Lebanon. | … |
| Morocco | X | No public support was used to establish the deposit insurance system and nonpublic monies are provided for in the legislation.6 | Fund. | Negotiable securities of the Moroccan government. | No. |
| Oman | X | The central bank matched half of the member banks’ initial contributions; the fund can borrow from the Government, the central bank and member banks. | Fund. | Must consider; risk, liquidity, and revenue. | Yes, for the deposit insurer. |
| WESTERN HEMISPHERE | |||||
| Argentina | X | The central bank contributed a small share of the initial capital. | Fund. | Abroad. | Yes. |
| Bahamas | X | The central bank contributed half the deposit insurance system’s initial capital. | Fund. | … | Yes: the deposit insurance system has priority for insured deposits. |
| Brazil | X | The deposit insurance system can either request funds from the central bank or authorization to borrow. Under the constitution no government support is available. | Fund. | A private decision. | No |
| Canada | X | The fund can borrow from the markets and the government, but is charged private market races.7 | Fund.7 | … | No, same rank as unsecured creditors. |
| Chile | No | The government is responsible for time and savings deposits and the central bank for demand deposits. | Government. | Government securities. | Yes, for insured depositors |
| Colombia | X | It is understood that the state is the ultimate guarantor. | Fund. | Colombian government securities. | No. |
| Dominican Republic | X | The government can fund the deposit insurance system for savings and loan associations. | Fund. | … | Yes, by law in 1999. |
| Ecuador | X | Until December 1999. the fund could request the central bank to provide liquidity to a bank in rehabilitation The deposit insurance system also received government bonds from the ministry of finance. However, under the dollarization scheme, no new money can be created. As the deposit insurance system has run out of cash, deposits have been frozen since March 1999, and must be repaid by government bonds. | Fund. | The deposit insurance system uses the same criteria as for investing international reserves. | Yes: same as for public deposits. |
| El Salvador | X | The central bank provided initial funding and it may also make loans to the deposit insurance system. | Fund. | Securities at home and abroad, foreign bank deposits, considering risk and liquidity | |
| Guatemala | X | The government may make a temporary, exceptional contribution, which is to be repaid by the banks later. | Fund. | Foreign or domestic, non-member institutions; to consider security, profitability, liquidity, and diversification. | Yes |
| Honduras | X | The government made an initial contribution, which may be repaid over time. The central bank has a contingent credit line for the deposit insurance system; the ministry of finance may issue bonds. | Fund. | A special fund at the central bank. | No. |
| Jamaica | X | The fund can borrow in the markets or from the government and has an explicit government guarantee | Fund. | Jamaican or foreign-government securities or banks. | No. |
| Mexico | X | Fund has borrowed from the central bank and ministry of finance. | Fund. | Liquid government securities. | Yes. |
| Peru | X | The central bank and the Treasury made initial contributions. Fund may borrow from the Treasury. | Fund. | Central bank and corporate securities, including foreign currency or government securities, bonds, mutual funds, but not Peruvian finance companies-to consider: security, liquidity, profitability and diversification. | No. |
| Trinidad & Tobago | X | Central bank made an initial contribution, matches banks’ contributions, and may lend to the fund. | Fund. | Cash and the marketable securities of domestic or foreign governments. | Yes, the deposit insurance system has priority for insured deposits. |
| United States | X | Government provided initial capital, bore S&L losses, and can lend to BIF and SAIF. | Fund. | Special issue U.S. government securities. | Yes. |
| Venezuela | X | Central bank and government have borne losses and refinanced FOGADE, the deposit insurance system. The central bank may make advances. | Fund. | Securities that are liquid and profitable, equity interests. | Yes, for small deposits. |
| 67 countries normally have an explicit, limited systems of deposit insurance* | 66 systems have some or all private funds, one is funded by government. | Funds in 55 countries have received government assistance or can expect to obtain it. Five countries deny that support will be provided. The situation is unclear in the remaining countries. | 58 systems build a fund and 9 rely mainly on ex post levies. | Typically domestic government securities. | Yes: 31. No: 30, No information: |
Excluding the scheme for credit cooperatives in Panama.
Funding reflects the ongoing responsibility to contribute to an insurance fund or to pay ex post assessments in order to compensate depositors of a failed bank. Situations where the government has provided initial funding, has an obligation to supply loans, or has borne losses are also indicated in column 3.
The government should be understood to include the central bank in determining official support for funding.
Resources from the government were needed in Lithuania to fund the system, which was expected to be fully funded from bank premiums starting in 1999.
In Poland, foreign banks retain their premiums until they are needed by the deposit insurance system.
The draft law in Bahrain provides for a fund, with contributions to be shared between the government and the banks.
If the fund proves to be insufficient in Morocco, depositor compensation is reduced pro rata.
The law in Canada does not require the CDIC to accumulate a fund. Instead, it puts aside provisions to cover expected future losses and accumulates them in a reserve (typically called an allowance for loan losses (ALL)). Currently, the CDIC has resources that exceed the ALL.
Private and Official Funding for Explicit Limited Deposit Insurance Systems.
| Region, Country or Province | Has Private Funding1 | Has Official Backing2 | Fund or Ex Post Assessment | Investing Fund Resources | Legal Priority for Depositors or the Deposit Insurance System |
|---|---|---|---|---|---|
| AFRICA | |||||
| Kenya | X | Central bank can make loans. | Fund. | No. | |
| Nigeria | X | Government (the ministry of finance and central bank) provided initial capital and can make loans. | Fund. | Mainly Nigerian T-bills. | Yes, de jure. |
| Tanzania | X | The government provided initial capital and the central bank can make loans. | Fund. | Tanzanian T-bills and loans to banks. | No.de jure, at par with other creditors. |
| Uganda | X | Government provided initial capital and will lend. | Fund. | Yes. | |
| ASIA | |||||
| Bangladesh | X | Deposit Insurance agency finances are co-mingled within the central bank. They would be separated under pending legislation and the deposit insurer could borrow from the central bank. | Fund. | Approved, risk-free securities and investments. | Yes. |
| India | X | The central bank provided initial capital. It and government give support with Parliamentary approval. | Fund | Indian central government securities. | No. at par with unsecured creditors. |
| Japan | X | Government and central bank provided initial capital. The central bank makes loans. The government has provided substantial assistance. | Fund. | Central and local government securities and corporate bonds. | No. |
| Kazakhstan | X | The deposit insurance system can borrow from the government and the central bank. | Fund | Government securities. | Yes. |
| Korea | X | The KDIC is legally authorized to borrow from the government or central bank with ministry of finance approval. | Fund. | … | No |
| Marshall Is. | X | Fund. | US government securities | Yes. | |
| Micronesia | X | Fund. | US government securities. | Yes. | |
| Philippines | X | The government provided initial capital, central bank made loans and has borne losses. | Fund. | … | Yes: die PDIC has priority for insured deposits. |
| Sri Lanka | X | The central bank provided initial capital and has advanced funds. | Fund. | … | No. |
| Taiwan Province of China | X | The government provided initial capital. The central bank makes loans against collateral or a guarantee from the ministry of finance. | Fund. | Cash, securities, government bonds, and bank debentures. | No. |
| EUROPE | |||||
| Austria | X | Government-guaranteed bonds may be issued. | Ex post | Not relevant. | Yes: for small depositors. |
| Belgium | X | The state has provided a limited temporary guarantee. | Fund. | … | No. |
| Bulgaria | X | Fund has the left to borrow, including from the government in the last resort, and to receive donations and foreign assistance. | Fund. | … | Yes, for the deposit insurer. |
| Croatia | X | The fund may borrow from the central bank. | Fund. | Short-term government and central bank securities. | Yes, for insured deposits. |
| Czech Republic | X | The central bank and the government would equally make loans to cover any shortfall in funding. | Fund. | … | No. |
| Denmark | X | The deposit insurer can borrow from banks with a guarantee from the government. | Fund. | … | No. |
| Estonia | X | The government made an initial contribution The fund can borrow without a government guarantee or ask the government to borrow a limited amount on its behalf. | Fund. | OECD-country bonds, deposits of non-member credit institutions. | No. |
| Finland | X | The government and the central bank have borne losses. The fund can borrow with a government guarantee. | Fund. | No. | |
| France | X | The Government re-capitalized Credit Lyonnais outside the deposit insurance system. Both the old and the new deposit insurance systems are funded solely from private sources. | Fund beginning in 1999. | … | No. |
| Germany | X | Local governments have supported the scheme for savings institutions. Other schemes can borrow, but the law requires that compensation under the public scheme be paid from members’ annual supplementary contributions. | Fund (ex post for one private system). | … | No. |
| Gibraltar | X | None, | Ex post (fund for admin, expenses). | Not relevant. | No. |
| Greece | X | Sixty percent of the start-up funding was provided by the central bank. | Fund. | 80% in members’ CDs.20% government paper. | |
| Hungary | X | The government will guarantee fund borrowing from the central bank or private markets if requested. | Fund. | Hungarian government bonds, credit institution deposits. | Yes, for private persons’ deposits. |
| Iceland 5 | X | No support. | Fund. | … | No. |
| Ireland | X | … | Fund, | … | No. |
| Italy | X | Under the Legge Decree, the Bank of Italy can make low-interest rate loans to facilitate a large pay-out. The government has recently provided substantial financial assistance to the deposit insurance system. | Only for admin, expenses (thinking of changing). | Not relevant. | Yes: insurer has priority for insured deposits. |
| Latvia | X | The Bank of Latvia and the government made initial contributions. Compensation is paid from the government’s budget if fund resources are inadequate. | Fund. | Latvian government securities. | Yes, de jure. |
| Lithuania | X | The government provided initial capital and will cover any shortfall with loans.3 | Fund. | … | Yes, for insured deposits. |
| Luxembourg | X | … | Ex post | Not relevant. | … |
| Macedonia | X | The central bank can extend credit if the fund lacks resources to pay insured depositors. | Fund. | Securities issued by the central bank. | Yes, for insured deposits. |
| Netherlands | X | The central bank provides interest-free bridge financing. | Ex post | Not relevant. | No. |
| Norway | X | Government and central bank have borne losses. The government created a Government Bank Insurance Fund to make loans to the Commercial Bank and the Savings Bank Guarantee Funds, whose resources had been depleted by the banking crisis. | Fund. | … | Yes, if the bank is under public administration. |
| Poland | X | The Bank of Poland and the government contributed initial capital. | Fund. | Assistance loans CO banks and government securities.4 | Yes: the insurer has priority. |
| Portugal | X | The Bank of Portugal provided initial capital. | Fund. | Assets agreed with the central bank. | No |
| Romania | X | The fund can borrow from the state, the central bank, and other sources. The government can guarantee the debt. | Fund. | Romanian T-bills. | No |
| Slovak Republic | X | The central bank made an initial contribution and may make loans. | Fund. | … | No. |
| Spain | X | The central bank can make limited loans. | Fund. | Interest-bearing account at the National Debt Office. | No. |
| Sweden | X | The government has borne losses. The deposit insurer may borrow from the National Debt Office. | Fund. | … | No. |
| Switzerland | X | No, The Swiss Banker’s Association borrows under normal market conditions. | Ex post. | Not relevant. | Yes, for insured depositors. |
| Turkey | X | Credit may be extended by the central bank in case of insufficiency in funding. | Fund. | In banks to obtain high yields. | Yes, de jure |
| Ukraine | X | The government made an initial contribution through the National Bank of the Ukraine. The deposit insurer can borrow from the government | Fund. | Ukrainian government securities. | Yes, for the deposit insurer. |
| United Kingdom | X | The central bank made loans in the past but there is now no public funding for the deposit insurance system, but it may borrow limited amounts in the markets with Treasury approval. | Small fund (£5m to £6m) mainly ex post | Yes, the deposit insurance agency has priority in recoveries | Treasury bills for the small fund. |
| MIDDLE EAST | |||||
| Bahrain | X | The new law would allow the deposit insurance system to borrow from the markets or the central bank. | ex post, currently.5 | Not relevant. | No |
| Lebanon | X | The central bank contributed half of the deposit insurance system’s initial capital. The government matches banks’ annual contributions. If the fund is depleted the central bank replenishes it by making interest-free loans. | Fund. | Lebanese T-bills, bonds and real estate in Lebanon. | … |
| Morocco | X | No public support was used to establish the deposit insurance system and nonpublic monies are provided for in the legislation.6 | Fund. | Negotiable securities of the Moroccan government. | No. |
| Oman | X | The central bank matched half of the member banks’ initial contributions; the fund can borrow from the Government, the central bank and member banks. | Fund. | Must consider; risk, liquidity, and revenue. | Yes, for the deposit insurer. |
| WESTERN HEMISPHERE | |||||
| Argentina | X | The central bank contributed a small share of the initial capital. | Fund. | Abroad. | Yes. |
| Bahamas | X | The central bank contributed half the deposit insurance system’s initial capital. | Fund. | … | Yes: the deposit insurance system has priority for insured deposits. |
| Brazil | X | The deposit insurance system can either request funds from the central bank or authorization to borrow. Under the constitution no government support is available. | Fund. | A private decision. | No |
| Canada | X | The fund can borrow from the markets and the government, but is charged private market races.7 | Fund.7 | … | No, same rank as unsecured creditors. |
| Chile | No | The government is responsible for time and savings deposits and the central bank for demand deposits. | Government. | Government securities. | Yes, for insured depositors |
| Colombia | X | It is understood that the state is the ultimate guarantor. | Fund. | Colombian government securities. | No. |
| Dominican Republic | X | The government can fund the deposit insurance system for savings and loan associations. | Fund. | … | Yes, by law in 1999. |
| Ecuador | X | Until December 1999. the fund could request the central bank to provide liquidity to a bank in rehabilitation The deposit insurance system also received government bonds from the ministry of finance. However, under the dollarization scheme, no new money can be created. As the deposit insurance system has run out of cash, deposits have been frozen since March 1999, and must be repaid by government bonds. | Fund. | The deposit insurance system uses the same criteria as for investing international reserves. | Yes: same as for public deposits. |
| El Salvador | X | The central bank provided initial funding and it may also make loans to the deposit insurance system. | Fund. | Securities at home and abroad, foreign bank deposits, considering risk and liquidity | |
| Guatemala | X | The government may make a temporary, exceptional contribution, which is to be repaid by the banks later. | Fund. | Foreign or domestic, non-member institutions; to consider security, profitability, liquidity, and diversification. | Yes |
| Honduras | X | The government made an initial contribution, which may be repaid over time. The central bank has a contingent credit line for the deposit insurance system; the ministry of finance may issue bonds. | Fund. | A special fund at the central bank. | No. |
| Jamaica | X | The fund can borrow in the markets or from the government and has an explicit government guarantee | Fund. | Jamaican or foreign-government securities or banks. | No. |
| Mexico | X | Fund has borrowed from the central bank and ministry of finance. | Fund. | Liquid government securities. | Yes. |
| Peru | X | The central bank and the Treasury made initial contributions. Fund may borrow from the Treasury. | Fund. | Central bank and corporate securities, including foreign currency or government securities, bonds, mutual funds, but not Peruvian finance companies-to consider: security, liquidity, profitability and diversification. | No. |
| Trinidad & Tobago | X | Central bank made an initial contribution, matches banks’ contributions, and may lend to the fund. | Fund. | Cash and the marketable securities of domestic or foreign governments. | Yes, the deposit insurance system has priority for insured deposits. |
| United States | X | Government provided initial capital, bore S&L losses, and can lend to BIF and SAIF. | Fund. | Special issue U.S. government securities. | Yes. |
| Venezuela | X | Central bank and government have borne losses and refinanced FOGADE, the deposit insurance system. The central bank may make advances. | Fund. | Securities that are liquid and profitable, equity interests. | Yes, for small deposits. |
| 67 countries normally have an explicit, limited systems of deposit insurance* | 66 systems have some or all private funds, one is funded by government. | Funds in 55 countries have received government assistance or can expect to obtain it. Five countries deny that support will be provided. The situation is unclear in the remaining countries. | 58 systems build a fund and 9 rely mainly on ex post levies. | Typically domestic government securities. | Yes: 31. No: 30, No information: |
Excluding the scheme for credit cooperatives in Panama.
Funding reflects the ongoing responsibility to contribute to an insurance fund or to pay ex post assessments in order to compensate depositors of a failed bank. Situations where the government has provided initial funding, has an obligation to supply loans, or has borne losses are also indicated in column 3.
The government should be understood to include the central bank in determining official support for funding.
Resources from the government were needed in Lithuania to fund the system, which was expected to be fully funded from bank premiums starting in 1999.
In Poland, foreign banks retain their premiums until they are needed by the deposit insurance system.
The draft law in Bahrain provides for a fund, with contributions to be shared between the government and the banks.
If the fund proves to be insufficient in Morocco, depositor compensation is reduced pro rata.
The law in Canada does not require the CDIC to accumulate a fund. Instead, it puts aside provisions to cover expected future losses and accumulates them in a reserve (typically called an allowance for loan losses (ALL)). Currently, the CDIC has resources that exceed the ALL.
Building the Fund in an Explicit Limited Deposit Insurance System
Excluding the six African countries whose deposit insurance system agreement is not fully ratified, and Panama, which has explicit coverage only for credit cooperatives
CAR stands for the capital adequacy ratio. NPLs are non-performing loans. CAMELS stands for capital adequacy, asset quality, management capacity, earnings, liquidity, and systemic risk.
The target in Tanzania is to be raised to this level by June 30, 2001.
The premium in Belgium can be raised by a maximum of 0.04 percent when the funds’ liquid assets fall below a critical level.
The Bulgarian fund can request an advance premium of 1.5 percent of the deposit base if it has insufficient resources.
The premium charged by the private deposit insurance schemes in Germany vary by scheme from 0.004 percent to 0.1 percent.
When the fund reaches a reasonable level in Greece, a bank’s premium is based on the increase in its deposits. The deposit insurance system invests 80% of a bank’s contribution in a time deposit at the bank.
The target in Macedonia is set at 5% and 15% of deposits in different places in the legislation
In the Netherlands, the ex post assessments are made case-by-case on the basis of several items of data recently reported to the central bank. A comparison is made between the portfolios of the failed bank and the assessed bank. Costs are apportioned after consultation with the bankers’ committee.
Article 25 of the deposit insurance law in Poland sets premiums at no more than 0.4 percent of deposits. However, Article 13 states that premiums should not exceed 0.4 percent of the sum of assets rated according to risk. Banks in Poland keep control over their contributions until they are needed, invest in Treasury securities and keep the interest.
Building societies in the Slovak Republic pay premiums at half the commercial banks’ rate. Coverage is adjusted periodically.
In Lebanon, the premium paid by the banks is matched by a contribution from the government.
To reduce central bank exposure, Chilean banks with demand deposits in excess of 2.5 times capital and reserves have to maintain a 100 percent marginal reserve requirement invested in short-term central bank or government securities that are liened to the central bank. The Chilean authorities regard the interest cost of maintaining the reserve requirement as imposing an implicit charge for deposit insurance coverage. The Chilean Central Bank guarantees demand deposits in full. Household savings and time deposits are co-insured 90% by the government to UF 120 (about $3,675) per person per year.
As many of the assets of the insurance fund in Colombia have been lent to weak institutions, the value of the fund’s reserves is overstated.
Premiums in Columbia will become risk-based when a risk-rating agency is established in Colombia, hopefully in the year 2000.
The premium in Peru is computed to the maximum amount insured and applies only to deposits of individuals and nonprofit institutions. Banks pay 0.65 percent of total deposits plus 0.2 percent for each higher risk category.
The U.S. is studying the possibility of revising its process of estimating the risk-adjustment.
The fund, FOGADE, has deferred recognizing the losses it suffered during the 1994–95 banking crisis. Consequently, fund reserves are overstated.
Venezuela raised the premium from 0.5 percent to 2.0 percent early in 1994 to help fund the heavy assistance to troubled banks.
Building the Fund in an Explicit Limited Deposit Insurance System
| Region, Country, or Province | Fund Target as a Percent of Deposits | Actual Fund as a Percent of Deposits | Premium or Assessment Base | Annual Premium as a Percentage of the Assessment Base | Basis for Risk- Adjusting Premiums 1 |
|---|---|---|---|---|---|
| AFRICA | |||||
| Kenya | 20%of insured deposits. | 5.3% insured deposits. | Deposits. | 0.15 | |
| Nigeria | Not specified. | … | Deposits. | 0.9375 | |
| Tanzania | 3% of total deposits.2 | 2.7% of total deposits. | Deposits. | 0.1 | |
| Uganda | No. | Reported to be very low. | Deposits. | 0.2 | |
| ASIA | |||||
| Bangladesh | … | 0.4% of insured deposits | Deposits | 0.005 | |
| India | No, but 2% has been proposed. | 0.7% of insured deposits | Deposits. | 0.05 | |
| Japan | No. | Currently has a deficit. | Insured deposits. | 0.048 + 0.036 | |
| Kazakhstan | Yes T 500 million. | New scheme. | Insurable deposits. | Risk-based: 0.125 to 0.375 | Formula reflecting financial condition. |
| Korea | … | … | Deposits | 0.05 | |
| Marshall islands | U.S. system. | U.S. system | Deposits | Risk-based: 0.00 to 0.27 | Capital and CAMELS ratios |
| Micronesia | U.S. system. | U.S. system | Deposits. | Risk-based: 0.00 to 0.27 | Capital and CAMELS ratios. |
| Philippines | … | 22 billion pesos. | Deposits | 0.2 | |
| Sri Lanka | … | Very low (80 mil. Rupees). | Deposits | 0.15 | |
| Taiwan Province of China | 0.5% of insured deposits. | 0.3% insured deposits | Covered deposits. | Risk-based: 0.05 to 0.06 (since 1/1/2000), | 9 categories reflecting CAR and rating on the early warning system. |
| EUROPE | |||||
| Austria | … | … | Covered deposits. | pro rata, ex post. | |
| Belgium | 0.5% of insured deposits. | 15.8 billion Belgian francs or 0.25% insured deposits. | Covered deposits. | 0.02 * 0.04 if necessary.3 | |
| Bulgaria | Yes, 5% of total deposits. | 30 million new BGL | Insurable deposits. | 0.5 4 | |
| Croatia | 5% of insured deposits. | 0.85% of Insured deposits end 1998. | Insured deposits. | 0.2 can be risk-adjusted. | As determined by the at central bank. |
| Czech Republic | … | … | Insured deposits. | Commercial banks: 0.5 Savings banks: 0.1 | |
| Denmark | Yes. DKK 3 billion. | … | Allocated as a % of covered deposits. | 0.2 (max) of total deposits | |
| Estonia | 3% of insured deposits. | New scheme. | Deposits until 2002. | 0.5% (max). | |
| Finland | 2% of insured deposits. | FIM 300 mil. or 0.14% of insured deposits. | Insured deposits. | Risk-based: 0.05 to 0.3. which can be increased in an emergency. | Solvency ratio. |
| France | … | New scheme. | Deposits plus 1/3 loans | Risk-based since June 1999. Previously on demand. | BS calculates the adjustment based on CAMEL-like ratings. |
| Germany | Yes, 3% of loans. | Target met. | Amount owed to customers. | 0.008 in the statutory scheme 0.0 to 0.1 in the private sector.5 | Risk category and length of membership in the private deposit insurance system. |
| Gibraltar | No | New scheme. | Insured deposits. | There is a small fund for administrative expenses: otherwise charges are ex post. | |
| Greece | A reasonable level. | GD 81 billion at end 1999. | Deposits.6 | Decreasing by size: .0025 to 125 6 Can be tripled in an emergency. | |
| Hungary | Informally 1.5% insured deposits. | 1 % of insured deposits. | Insurable deposits | 0.19. decreasing by size to 0.16 plus risk adjustment. | Additional charge if bank falls below minimum CAR. |
| Iceland | … | … | Insured deposits. | 0.15 | |
| Ireland | … | … | EU and EEA, i.e., insured deposits at all branches of credit institutions in the EEA | 0.2 at start. Currently no regular premium only extraordinary assessments. | |
| Italy | 0.4–0.8% of covered deposits: for administrative expenses. | 0.4% of total deposits. | Protected funds adjusted for size and risk | Risk-adjusted charges are levied ex post to restore the funds to their required levels. | Index with 28 gradations based on risk, solvency, maturity transformation, and performance |
| Latvia | Not specified. | New scheme. | Insured deposits | 0.3 | |
| Lithuania | For savings bank scheme. | 100 million Lira or 2.5% of deposits. | Insured deposits. | 1.5 falling to 1.0 in 2000. | |
| Luxembourg | … | … | Insured deposits. | Ex post to a maximum of 5% of capital. | |
| Macedonia | 5% of insured deposits.7 | 3% of insured deposits. | Insured deposits. | Risk-based: l%to2.5% plus supplement, if needed. | Capital ratio and financial standing. |
| Netherlands | … | … | Case by case 8 Share of insured deposits. | Ex post to a maximum of 10% of capital. | |
| Norway | 1.5% deposits + 0.5% risk-adjusted assets | … | Risk-weighted assets and total deposits. | 0.5 of risk-weighted assets 0.15 deposits. | Risk-weighted assets. |
| Poland | 0.4 percent of deposits | 1.8 % of insured deposits. | Deposits, also risk adjusted assets.9 | not more than 0.4, but includes risk-adjustment. | Risk-weighted assets. |
| Portugal | … | … | Insured deposits. | Risk-based from 0.08 to 0.12 + more in emergencies. | Condition, including solvency. |
| Romania | 10% of personal deposits. | 1.8% of insured deposits. | Insured deposits. | Risk-based from 0.3 to 0.6. | Complex formula reflecting, capital. NPLs, profits, liquidity, and risk assets. |
| Slovak Republic | 1.5% of insured deposits. | 0.47% insured deposits. | Insured deposits. | 0.1 to 0.3 for banks.10 | |
| Spain | 1 % of deposits. | Insured deposits. | 0.1 (Max. of 0.2) | ||
| Sweden | 2.5% of total deposits. | … | Covered deposits. | Risk-based. 0.5 now. 0.1 later. | From 60% to 140% of base depending on CAR. |
| Switzerland | … | … | Discretion but Considering gross earnings and balance sheet items, including covered deposits. | Ex post, on demand, varies. | Based on earnings and some discretion. |
| Turkey | No. | 5% of insured deposits. | Insured savings deposits. | Risk-based. 1.0 or 1.2 | CAR: banks with more than 8% capital pay the lower rate. |
| Ukraine | … | 10% insured deposits. | Total deposits. | 0.5 plus special charges that are NOT risk-based. | |
| United Kingdom | £5m-£6m for administrative expenses. | <£3m | EEA deposits i.e., insured deposits. | On demand. Not to exceed 0.3 % of guaranteed deposits | |
| MIDDLE EAST | |||||
| Bahrain | … | … | Deposits. | ex post, | |
| Lebanon | … | … | Credit accounts. | 0.05 11 | |
| Morocco | No. | … | Total deposits. | 0.2 | |
| Oman | … | … | Deposits. | 0.02, but can range from 0.1 to 0.3 over time. | |
| WESTERN HEMISPHERE | |||||
| Argentina | 5% of total deposits. | 0.1% of total deposits in December 1998. | Insurable deposits. | 0.3 basic plus risk adjustment with range from 0.36 to 0.72. | Formula that includes provisions, CAR, CAMEL, and risk assets |
| Bahamas | No, | Very new scheme. | Either insured or insurable deposits. | 0.05 | |
| Brazil | 5% of guaranteed deposits | … | Total deposits. | 0.3 + 0.15 as an extraordinary contribution. | |
| Canada | No. | C$500m–0.19% | Covered deposits. | Risk-adjusted, 0.04 to 0.33. | A complex formula with quantitative and qualitative factors including: capital adequacy, profitability, asset concentration, regulatory rating and adherence to standards. |
| Chile | No. | … | Not applicable. | None.12 | |
| Colombia | … | 11.7% of insured deposits at end 1998.13 | Insured deposits. | 0.3, to become risk adjusted in the year 2000.14 | A premium refund, based on a rating by an independent rating agency, is pending. |
| Dominican Republic | Deposits. | 0.1875 | |||
| Ecuador | 50% of insured deposits. | Deposits. | 0.65+ risk adjustment in the year 2000. | Risk rating to be developed by deposit insurance agency. | |
| El Salvador | Deposits. | 0.1. Can be raised to 0.3 to repay debt. Also there is a 50% risk-based mark-up. | If the bank has sub-standard securities or is subject to intervention or special supervision. | ||
| Guatemala | 10% of covered deposits. | New scheme. | Covered deposits. | 1.0 + 0.5 when the fund falls below its target. | |
| Honduras | 5% of deposits. | New scheme. | Deposits. | Not more than 0.25. | |
| Jamaica | Not dejure: but there is | New scheme J$44.4 | Insurable deposits. | 0.1 | |
| an admin target of 1% of insured deposits | million in March 1999. | ||||
| Mexico | No. | 0.11% of deposits in March 1998. | Deposits and other liabilities. | 0.4 plus special and risk adjustment to 0.8. | As determined by the ministry of finance. |
| Peru | … | … | Covered deposits. | Base of 0.65 plus risk adjustment15 | Risk category as determined by the supervisor. |
| Trinidad and Tobago | No | TT$ 250 million in 1998. | Deposits. | 0.2 | |
| United States | By law: 1.25% of insured deposits. | 1.4% of insured deposits | Domestic deposits. | Risk-based; 0.00 to 0.27. | Capital and CAMELS ratios.16 |
| Venezuela | 4% of total deposits.17 | Insurable deposits. | 2.0 18 | ||
| 67 countries* | 29 systems have a target, which ranges from 0.4% to 50% of insured deposits. | Resources range from a deficit to 10% of insured deposits. | All deposits: 27. Insured deposits: 36, including Covered deposits: 8. Non-deposit base: 2. | 58 countries regularly levy premiums that range from 0,00% to 2.0%, 24 countries risk-adjust their charges. | Vanes from the relatively simple compilation of risk based assets to complex formulae for assessing risk. |
Excluding the six African countries whose deposit insurance system agreement is not fully ratified, and Panama, which has explicit coverage only for credit cooperatives
CAR stands for the capital adequacy ratio. NPLs are non-performing loans. CAMELS stands for capital adequacy, asset quality, management capacity, earnings, liquidity, and systemic risk.
The target in Tanzania is to be raised to this level by June 30, 2001.
The premium in Belgium can be raised by a maximum of 0.04 percent when the funds’ liquid assets fall below a critical level.
The Bulgarian fund can request an advance premium of 1.5 percent of the deposit base if it has insufficient resources.
The premium charged by the private deposit insurance schemes in Germany vary by scheme from 0.004 percent to 0.1 percent.
When the fund reaches a reasonable level in Greece, a bank’s premium is based on the increase in its deposits. The deposit insurance system invests 80% of a bank’s contribution in a time deposit at the bank.
The target in Macedonia is set at 5% and 15% of deposits in different places in the legislation
In the Netherlands, the ex post assessments are made case-by-case on the basis of several items of data recently reported to the central bank. A comparison is made between the portfolios of the failed bank and the assessed bank. Costs are apportioned after consultation with the bankers’ committee.
Article 25 of the deposit insurance law in Poland sets premiums at no more than 0.4 percent of deposits. However, Article 13 states that premiums should not exceed 0.4 percent of the sum of assets rated according to risk. Banks in Poland keep control over their contributions until they are needed, invest in Treasury securities and keep the interest.
Building societies in the Slovak Republic pay premiums at half the commercial banks’ rate. Coverage is adjusted periodically.
In Lebanon, the premium paid by the banks is matched by a contribution from the government.
To reduce central bank exposure, Chilean banks with demand deposits in excess of 2.5 times capital and reserves have to maintain a 100 percent marginal reserve requirement invested in short-term central bank or government securities that are liened to the central bank. The Chilean authorities regard the interest cost of maintaining the reserve requirement as imposing an implicit charge for deposit insurance coverage. The Chilean Central Bank guarantees demand deposits in full. Household savings and time deposits are co-insured 90% by the government to UF 120 (about $3,675) per person per year.
As many of the assets of the insurance fund in Colombia have been lent to weak institutions, the value of the fund’s reserves is overstated.
Premiums in Columbia will become risk-based when a risk-rating agency is established in Colombia, hopefully in the year 2000.
The premium in Peru is computed to the maximum amount insured and applies only to deposits of individuals and nonprofit institutions. Banks pay 0.65 percent of total deposits plus 0.2 percent for each higher risk category.
The U.S. is studying the possibility of revising its process of estimating the risk-adjustment.
The fund, FOGADE, has deferred recognizing the losses it suffered during the 1994–95 banking crisis. Consequently, fund reserves are overstated.
Venezuela raised the premium from 0.5 percent to 2.0 percent early in 1994 to help fund the heavy assistance to troubled banks.
Building the Fund in an Explicit Limited Deposit Insurance System
| Region, Country, or Province | Fund Target as a Percent of Deposits | Actual Fund as a Percent of Deposits | Premium or Assessment Base | Annual Premium as a Percentage of the Assessment Base | Basis for Risk- Adjusting Premiums 1 |
|---|---|---|---|---|---|
| AFRICA | |||||
| Kenya | 20%of insured deposits. | 5.3% insured deposits. | Deposits. | 0.15 | |
| Nigeria | Not specified. | … | Deposits. | 0.9375 | |
| Tanzania | 3% of total deposits.2 | 2.7% of total deposits. | Deposits. | 0.1 | |
| Uganda | No. | Reported to be very low. | Deposits. | 0.2 | |
| ASIA | |||||
| Bangladesh | … | 0.4% of insured deposits | Deposits | 0.005 | |
| India | No, but 2% has been proposed. | 0.7% of insured deposits | Deposits. | 0.05 | |
| Japan | No. | Currently has a deficit. | Insured deposits. | 0.048 + 0.036 | |
| Kazakhstan | Yes T 500 million. | New scheme. | Insurable deposits. | Risk-based: 0.125 to 0.375 | Formula reflecting financial condition. |
| Korea | … | … | Deposits | 0.05 | |
| Marshall islands | U.S. system. | U.S. system | Deposits | Risk-based: 0.00 to 0.27 | Capital and CAMELS ratios |
| Micronesia | U.S. system. | U.S. system | Deposits. | Risk-based: 0.00 to 0.27 | Capital and CAMELS ratios. |
| Philippines | … | 22 billion pesos. | Deposits | 0.2 | |
| Sri Lanka | … | Very low (80 mil. Rupees). | Deposits | 0.15 | |
| Taiwan Province of China | 0.5% of insured deposits. | 0.3% insured deposits | Covered deposits. | Risk-based: 0.05 to 0.06 (since 1/1/2000), | 9 categories reflecting CAR and rating on the early warning system. |
| EUROPE | |||||
| Austria | … | … | Covered deposits. | pro rata, ex post. | |
| Belgium | 0.5% of insured deposits. | 15.8 billion Belgian francs or 0.25% insured deposits. | Covered deposits. | 0.02 * 0.04 if necessary.3 | |
| Bulgaria | Yes, 5% of total deposits. | 30 million new BGL | Insurable deposits. | 0.5 4 | |
| Croatia | 5% of insured deposits. | 0.85% of Insured deposits end 1998. | Insured deposits. | 0.2 can be risk-adjusted. | As determined by the at central bank. |
| Czech Republic | … | … | Insured deposits. | Commercial banks: 0.5 Savings banks: 0.1 | |
| Denmark | Yes. DKK 3 billion. | … | Allocated as a % of covered deposits. | 0.2 (max) of total deposits | |
| Estonia | 3% of insured deposits. | New scheme. | Deposits until 2002. | 0.5% (max). | |
| Finland | 2% of insured deposits. | FIM 300 mil. or 0.14% of insured deposits. | Insured deposits. | Risk-based: 0.05 to 0.3. which can be increased in an emergency. | Solvency ratio. |
| France | … | New scheme. | Deposits plus 1/3 loans | Risk-based since June 1999. Previously on demand. | BS calculates the adjustment based on CAMEL-like ratings. |
| Germany | Yes, 3% of loans. | Target met. | Amount owed to customers. | 0.008 in the statutory scheme 0.0 to 0.1 in the private sector.5 | Risk category and length of membership in the private deposit insurance system. |
| Gibraltar | No | New scheme. | Insured deposits. | There is a small fund for administrative expenses: otherwise charges are ex post. | |
| Greece | A reasonable level. | GD 81 billion at end 1999. | Deposits.6 | Decreasing by size: .0025 to 125 6 Can be tripled in an emergency. | |
| Hungary | Informally 1.5% insured deposits. | 1 % of insured deposits. | Insurable deposits | 0.19. decreasing by size to 0.16 plus risk adjustment. | Additional charge if bank falls below minimum CAR. |
| Iceland | … | … | Insured deposits. | 0.15 | |
| Ireland | … | … | EU and EEA, i.e., insured deposits at all branches of credit institutions in the EEA | 0.2 at start. Currently no regular premium only extraordinary assessments. | |
| Italy | 0.4–0.8% of covered deposits: for administrative expenses. | 0.4% of total deposits. | Protected funds adjusted for size and risk | Risk-adjusted charges are levied ex post to restore the funds to their required levels. | Index with 28 gradations based on risk, solvency, maturity transformation, and performance |
| Latvia | Not specified. | New scheme. | Insured deposits | 0.3 | |
| Lithuania | For savings bank scheme. | 100 million Lira or 2.5% of deposits. | Insured deposits. | 1.5 falling to 1.0 in 2000. | |
| Luxembourg | … | … | Insured deposits. | Ex post to a maximum of 5% of capital. | |
| Macedonia | 5% of insured deposits.7 | 3% of insured deposits. | Insured deposits. | Risk-based: l%to2.5% plus supplement, if needed. | Capital ratio and financial standing. |
| Netherlands | … | … | Case by case 8 Share of insured deposits. | Ex post to a maximum of 10% of capital. | |
| Norway | 1.5% deposits + 0.5% risk-adjusted assets | … | Risk-weighted assets and total deposits. | 0.5 of risk-weighted assets 0.15 deposits. | Risk-weighted assets. |
| Poland | 0.4 percent of deposits | 1.8 % of insured deposits. | Deposits, also risk adjusted assets.9 | not more than 0.4, but includes risk-adjustment. | Risk-weighted assets. |
| Portugal | … | … | Insured deposits. | Risk-based from 0.08 to 0.12 + more in emergencies. | Condition, including solvency. |
| Romania | 10% of personal deposits. | 1.8% of insured deposits. | Insured deposits. | Risk-based from 0.3 to 0.6. | Complex formula reflecting, capital. NPLs, profits, liquidity, and risk assets. |
| Slovak Republic | 1.5% of insured deposits. | 0.47% insured deposits. | Insured deposits. | 0.1 to 0.3 for banks.10 | |
| Spain | 1 % of deposits. | Insured deposits. | 0.1 (Max. of 0.2) | ||
| Sweden | 2.5% of total deposits. | … | Covered deposits. | Risk-based. 0.5 now. 0.1 later. | From 60% to 140% of base depending on CAR. |
| Switzerland | … | … | Discretion but Considering gross earnings and balance sheet items, including covered deposits. | Ex post, on demand, varies. | Based on earnings and some discretion. |
| Turkey | No. | 5% of insured deposits. | Insured savings deposits. | Risk-based. 1.0 or 1.2 | CAR: banks with more than 8% capital pay the lower rate. |
| Ukraine | … | 10% insured deposits. | Total deposits. | 0.5 plus special charges that are NOT risk-based. | |
| United Kingdom | £5m-£6m for administrative expenses. | <£3m | EEA deposits i.e., insured deposits. | On demand. Not to exceed 0.3 % of guaranteed deposits | |
| MIDDLE EAST | |||||
| Bahrain | … | … | Deposits. | ex post, | |
| Lebanon | … | … | Credit accounts. | 0.05 11 | |
| Morocco | No. | … | Total deposits. | 0.2 | |
| Oman | … | … | Deposits. | 0.02, but can range from 0.1 to 0.3 over time. | |
| WESTERN HEMISPHERE | |||||
| Argentina | 5% of total deposits. | 0.1% of total deposits in December 1998. | Insurable deposits. | 0.3 basic plus risk adjustment with range from 0.36 to 0.72. | Formula that includes provisions, CAR, CAMEL, and risk assets |
| Bahamas | No, | Very new scheme. | Either insured or insurable deposits. | 0.05 | |
| Brazil | 5% of guaranteed deposits | … | Total deposits. | 0.3 + 0.15 as an extraordinary contribution. | |
| Canada | No. | C$500m–0.19% | Covered deposits. | Risk-adjusted, 0.04 to 0.33. | A complex formula with quantitative and qualitative factors including: capital adequacy, profitability, asset concentration, regulatory rating and adherence to standards. |
| Chile | No. | … | Not applicable. | None.12 | |
| Colombia | … | 11.7% of insured deposits at end 1998.13 | Insured deposits. | 0.3, to become risk adjusted in the year 2000.14 | A premium refund, based on a rating by an independent rating agency, is pending. |
| Dominican Republic | Deposits. | 0.1875 | |||
| Ecuador | 50% of insured deposits. | Deposits. | 0.65+ risk adjustment in the year 2000. | Risk rating to be developed by deposit insurance agency. | |
| El Salvador | Deposits. | 0.1. Can be raised to 0.3 to repay debt. Also there is a 50% risk-based mark-up. | If the bank has sub-standard securities or is subject to intervention or special supervision. | ||
| Guatemala | 10% of covered deposits. | New scheme. | Covered deposits. | 1.0 + 0.5 when the fund falls below its target. | |
| Honduras | 5% of deposits. | New scheme. | Deposits. | Not more than 0.25. | |
| Jamaica | Not dejure: but there is | New scheme J$44.4 | Insurable deposits. | 0.1 | |
| an admin target of 1% of insured deposits | million in March 1999. | ||||
| Mexico | No. | 0.11% of deposits in March 1998. | Deposits and other liabilities. | 0.4 plus special and risk adjustment to 0.8. | As determined by the ministry of finance. |
| Peru | … | … | Covered deposits. | Base of 0.65 plus risk adjustment15 | Risk category as determined by the supervisor. |
| Trinidad and Tobago | No | TT$ 250 million in 1998. | Deposits. | 0.2 | |
| United States | By law: 1.25% of insured deposits. | 1.4% of insured deposits | Domestic deposits. | Risk-based; 0.00 to 0.27. | Capital and CAMELS ratios.16 |
| Venezuela | 4% of total deposits.17 | Insurable deposits. | 2.0 18 | ||
| 67 countries* | 29 systems have a target, which ranges from 0.4% to 50% of insured deposits. | Resources range from a deficit to 10% of insured deposits. | All deposits: 27. Insured deposits: 36, including Covered deposits: 8. Non-deposit base: 2. | 58 countries regularly levy premiums that range from 0,00% to 2.0%, 24 countries risk-adjust their charges. | Vanes from the relatively simple compilation of risk based assets to complex formulae for assessing risk. |
Excluding the six African countries whose deposit insurance system agreement is not fully ratified, and Panama, which has explicit coverage only for credit cooperatives
CAR stands for the capital adequacy ratio. NPLs are non-performing loans. CAMELS stands for capital adequacy, asset quality, management capacity, earnings, liquidity, and systemic risk.
The target in Tanzania is to be raised to this level by June 30, 2001.
The premium in Belgium can be raised by a maximum of 0.04 percent when the funds’ liquid assets fall below a critical level.
The Bulgarian fund can request an advance premium of 1.5 percent of the deposit base if it has insufficient resources.
The premium charged by the private deposit insurance schemes in Germany vary by scheme from 0.004 percent to 0.1 percent.
When the fund reaches a reasonable level in Greece, a bank’s premium is based on the increase in its deposits. The deposit insurance system invests 80% of a bank’s contribution in a time deposit at the bank.
The target in Macedonia is set at 5% and 15% of deposits in different places in the legislation
In the Netherlands, the ex post assessments are made case-by-case on the basis of several items of data recently reported to the central bank. A comparison is made between the portfolios of the failed bank and the assessed bank. Costs are apportioned after consultation with the bankers’ committee.
Article 25 of the deposit insurance law in Poland sets premiums at no more than 0.4 percent of deposits. However, Article 13 states that premiums should not exceed 0.4 percent of the sum of assets rated according to risk. Banks in Poland keep control over their contributions until they are needed, invest in Treasury securities and keep the interest.
Building societies in the Slovak Republic pay premiums at half the commercial banks’ rate. Coverage is adjusted periodically.
In Lebanon, the premium paid by the banks is matched by a contribution from the government.
To reduce central bank exposure, Chilean banks with demand deposits in excess of 2.5 times capital and reserves have to maintain a 100 percent marginal reserve requirement invested in short-term central bank or government securities that are liened to the central bank. The Chilean authorities regard the interest cost of maintaining the reserve requirement as imposing an implicit charge for deposit insurance coverage. The Chilean Central Bank guarantees demand deposits in full. Household savings and time deposits are co-insured 90% by the government to UF 120 (about $3,675) per person per year.
As many of the assets of the insurance fund in Colombia have been lent to weak institutions, the value of the fund’s reserves is overstated.
Premiums in Columbia will become risk-based when a risk-rating agency is established in Colombia, hopefully in the year 2000.
The premium in Peru is computed to the maximum amount insured and applies only to deposits of individuals and nonprofit institutions. Banks pay 0.65 percent of total deposits plus 0.2 percent for each higher risk category.
The U.S. is studying the possibility of revising its process of estimating the risk-adjustment.
The fund, FOGADE, has deferred recognizing the losses it suffered during the 1994–95 banking crisis. Consequently, fund reserves are overstated.