Information Leaflet – A Deposit Guarantee Scheme Reimburses a Limited Amount to Compensate Account Holders Whose Bank in France Has Failed
Financial services are critical for the proper functioning of society. While respecting the principles of the open economy and free market, the public interest must be protected. Regulatory intervention should therefore be preventive. This ensures that the problems of a bank or financial institution are addressed before a failure occurs. As a result, customers are not affected or service is not interrupted. However, not all failing institutions are recoverable. The French deposit insurance and resolution fund can, at the request of the Prudential Supervision and Resolution Authority (ACPR), pay compensation for savings and other accounts and savings plans, and for financial securities that are protected by the failed institution.
Deposit Guarantee Scheme France: As part of its mission to safeguard the assets of customers of the supervised financial sector, the French deposit insurance and resolution fund (FGDR) contributes to the stability of the entire industry. To secure this position, the FGDR is responsible for the deposit guarantee scheme, the investor compensation scheme and the performance bonds guarantee scheme.
Secured Deposit Limit: 100.000 euros per depositor per bank.
Additional Insured Coverage: That standard secured deposit limit of 100.000 euros can be increased with an additional 500.000 euros in specific events for amounts that were received less than three months prior to the failure of the FGDR member institution. Furthermore, a French government guarantee is independent and is added to the secured deposit limit established by the FGDR in particular circumstances. The FGDR pays compensation for these savings accounts at the request and on behalf of the French government.
Claim Filing Procedure: Payout events are triggered by the ‘unavailability of deposits’. This is determined and communicated by the Prudential Supervision and Resolution Authority (ACPR). Upon this announcement, the FGDR starts preparation to reimbursement of eligible creditors of the failed financial institution. An online Secure Compensation Area is launched to allow creditors to submit their claim form and supporting evidence. The FGDR invites all account holders to collect their insured deposit by confirming the compensation letter, of proof their ownership.
Claim Submission and Repayment Timeframes: Within 7 business days after deposits become unavailable, the Secure Compensation Area is launched. Customers who do not chose a payment method via the Secure Compensation Area within 20 business days receive their compensation by bank check. Special cases and requests for additional compensation must be submitted within 2 months after the activation of the FGDR. The fund is open for a period of two months of the date of acknowledgement of the compensation letter send by the FGDR to eligible creditors.
Repayment Conditions: Reimbursement is made by the FGDR to the bank account of the eligible account holder held with another deposit taking credit institution. Creditors who fail to submit genuine account details may receive a personal bank cheque (with acknowledgement of receipt).
DGS Claim Rejections: Correspondence with the FGDR takes place through the Secure Compensation Area, by post or telephone. Decisions by the FGDR may be reinspected but the administrative court in Paris has jurisdiction over disputes involving the FGDR and its decisions. Caution is advised because there is a statutory limitation period of two months and representation by a lawyer is mandatory.
Scheme Architecture: In order to ensure adequate protection and immediate resolution for creditors of failed financial institutions, FGDR members prepay periodic contributions the scheme. The current reserve of the fund exceeds 5 Billion euros.
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