97
submitted 2 months ago by return2ozma@lemmy.world to c/asklemmy@lemmy.ml
you are viewing a single comment's thread
view the rest of the comments
[-] qaz@lemmy.world 15 points 2 months ago* (last edited 2 months ago)

Deposit guarantee schemes (DGS) reimburse up to a certain amount to compensate depositors whose bank has failed. A fundamental principle underlying DGS is that they are funded entirely by banks, and that no taxpayer funds are used.

Source: ECB

It works by having a central fund to back the money that qualifies for the deposit guarantee, however said funds only contains 0,8% of covered deposits. Although this might seem small, this is still a large amount of capital (~40 billion euro), and should be able to cover all deposits during a major financial crisis (like 2008) according to this research (ECB funded).

[-] d00phy@lemmy.world 11 points 2 months ago

Similar with the US FDIC:

The FDIC is primarily funded through assessments, which are insurance premiums paid by FDIC-insured institutions. These assessments are based on the balance of insured deposits and the risk posed by each bank. Additionally, the FDIC's Deposit Insurance Fund is invested in U.S. Treasury securities, earning interest that supplements the premiums paid by banks.

this post was submitted on 14 Aug 2024
97 points (98.0% liked)

Asklemmy

43811 readers
863 users here now

A loosely moderated place to ask open-ended questions

Search asklemmy ๐Ÿ”

If your post meets the following criteria, it's welcome here!

  1. Open-ended question
  2. Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
  3. Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
  4. Not ad nauseam inducing: please make sure it is a question that would be new to most members
  5. An actual topic of discussion

Looking for support?

Looking for a community?

~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~

founded 5 years ago
MODERATORS