Information Leaflet – A Deposit Guarantee Scheme Reimburses a Limited Amount to Compensate Account Holders Whose Bank in Sweden Has Failed
The Swedish National Debt Office, Riksgalden, is the public financial manager. It plays an important role within the central government, on financial markets and, consequently, to protect and maintain the stability of the national economy. Riksgalden set up the deposit insurance fund as an independent body. Bank account holders are reimbursed by the scheme if the bank or institution in which they have their money fails.
Deposit Guarantee Scheme Sweden: The deposit insurance scheme contributes to financial stability. Strong consumer protection allows depositors to feel confident even in times of financial instability. This helps to reduce the risk of a large number of depositors withdrawing their money at the same time and thus contributes to stability in the Swedish economy. The deposit insurance scheme is financed by contributions from the member banks and institutions, which are invested in a fund.
Activation of the Deposit Insurance Scheme: Finansinspektionen (the Swedish Financial Supervisory Authority) may also decide that the deposit insurance scheme is to be activated. The deposit insurance scheme also applies if the Debt Office takes control of a bank or institution in crisis through the process known as resolution.
Secured Deposit Limit: SEK 1,050,000 per depositor per bank (approximately 100.000 euro) paid out in Swedish Krona.
Additional Insured Coverage: A distinction for additional compensation is made for temporarily high account balances and specific investment accounts. Additional coverage in the amount of SEK 5,000.000 (approximately 500.000 euro) is available for deposits deriving from transactions that serve certain social purposes and the sale of private real estate within limited time prior to the closure of the bank. Investors may also receive protection if their financial institution fails and is no longer able to meet its obligations under securities transactions. In this case, investor compensation is set at a maximum level of SEK 250,000 (approximately 25.000 euro).
Claim Filing Procedure: If the deposit insurance scheme is activated, the Debt Office will contact the creditors of the bank to ensure that they receive the compensation amount they are entitled to. The Swedish deposit insurance schemes makes the repayable amount available within seven working days from the date on which the deposit guarantee took effect.
Claim Submission Timeframe: A claim to the deposit insurance scheme can only be made prior to the start of the liquidation and bankruptcy proceedings of the failed institution.
Repayment Timeframe: Compensation shall be paid out within 20 working days of the claim submission. Claim verification may justify an extension of another 10 days.
Repayment Conditions: The Swedish deposit insurance scheme is activated upon the unavailability of account deposits at a member institution. This is most often when the financial institution is declared insolvent or goes bankrupt.
DGS Claim Rejections: Matters relating to the rejection of a claim under the Swedish deposit insurance scheme may be reinspected by the fund administration. Additionally, rejections under the Deposit Insurance Act may be appealed at the General Administrative Court.
Scheme Architecture: Funded by its members, the Swedish deposit insurance scheme holds SEK 46.422 billion (€4.535 billion) in financial reserves. These reserves are used to reimburse eligible account holders when one of the fund members fails and customers have no access to their money anymore.
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