Deposit guarantee/ Joint Liability Scheme
Joint Liability Scheme - The Guarantee System of the Savings Bank Finance Group
All the local savings banks, as well as the Landesbanken and the Landesbausparkassen are affiliated to the guarantee system of the Savings Bank Finance Group.
The Joint Liability Scheme is made up of a total of 13 gurantee schemes:
- the eleven regional savings bank guarantee funds,
- the Guarantee Fund of the Central Savings Banks and Central Giro Institutions, and
- the Guarantee Fund of the Central Building Societies.
The purpose of the guarantee funds that have been integrated into the Joint Liability Scheme is to safeguard institutions as defined in Section 12 of the German Deposit Guarantee and Investor Compensation Act. The guarantee funds protect the affiliated institutions themselves, and in particular safeguard their liquidity and solvency. This ensures that each institution can continue to meet its financial obligations. Claims of depositors – in particular from savings deposits, time deposits and sight deposits as well as claims evidenced by certificates – can therefore be fully satisfied when they mature.
The Joint Liability Scheme provides a maximum degree of reliability for costumers of the Savings Bank Finance Group.Since the establishment of the Guarantee System of the Savings Bank Finance Group in the 1970s
- no customer of a member institution has ever lost his or her deposits;
- it has never been necessary to indemnify depositors;
- no member institution has ever defaulted on its financial obligations, let alone become insolvent.
As of 1 January 2006, amendments to the rules for the guarantee funds have further improved the guarantee system and increased the stability of the member institutions of the Savings Bank Finance Group. The core elements of the improved features of the guarantee system are:
- a 50-percent increase in the volume covered by the Joint Liability Scheme;
- the optimisation of risk monitoring as a means of improving the system designed to identify potential risks at an early point in time;
- the introduction of risk-based computation of contributions to themguarantee schemes;
- the introduction of a broader scope for action for the guarantee schemes.
How does the Joint Liability Scheme work?
When a member institution encounters financial difficulties or when it is at risk of encountering such difficulties, the relevant guarantee fund of the Savings Bank Finance Group will support the institution concerned and safeguard this institution’s solvency and liquidity.
To this end, the guarantee scheme may adopt a variety of measures: allocating capital resources, assuming guarantees or making other interest-bearing commitments to pay debts, as well as meeting claims by third parties against the member institution concerned.
The various guarantee funds that are affiliated to the Joint Liability Scheme are interlinked.
The 11 guarantee funds of the regional associations of savings banks are interconnected by means of a Supraregional Compensation Scheme. Should the expenses incurred by a regional savings bank association for the settlement of a support case be in excess of the funds to be provided by the regional guarantee fund, the excess will be covered by the Supraregional Compensation Scheme. In this way, all the 11 regional guarantee funds jointly assume liability so that, if need be, the total volume of all funds can be jointly made available, although the regional guarantee funds retain their independence.
The Deutscher Sparkassen- und Giroverband (DSGV) has established separate funds for the Landesbanken / Girozentralen (the Guarantee Fund of the Landesbanken and Girozentralen) and also for the Landesbausparkassen (Guarantee Fund of the Landesbausparkassen).
The association of all the savings banks guarantee funds is interlinked with the two other funds (the Guarantee Fund of the Landesbanken and Girozentralen and the Guarantee Fund of the Landesbausparkassen) via the Joint Liability Scheme. This Scheme will assume liability if the expenses required to settle a support case are in excess of the funds available to the guarantee fund concerned. This means that this Joint Liability Scheme has access to the total volume of the financial resources of all the guarantee funds to safeguard an institution in the event of a crises.
What institutions are affiliated to the Guarantee Fund of the Landesbanken and Girozentralen?
Below you will find a list of all the institutions that are members of the Guarantee Fund of the Landesbanken and Girozentralen.
The following institutions are members of the Guarantee Fund of the Landesbanken and Girozentralen:
- Bayerische Landesbank, Munich;
- Bremer Landesbank Kreditanstalt Oldenburg - Girozentrale-, Bremen;
- DekaBank Deutsche Girozentrale, Frankfurt/Main;
- HSH Nordbank AG, Hamburg and Kiel;
- Landesbank Baden-Württemberg, Stuttgart, Karlsruhe and Mannheim;
- Landesbank Berlin AG, Berlin;
- Landesbank Hessen-Thüringen - Girozentrale -, Frankfurt/Main and Erfurt;
- Landesbank Saar, Saarbrücken;
- Norddeutsche Landesbank Girozentrale, Hanover, Brunswick and Magdeburg.
In addition, the following institutions are also affiliated to the Guarantee Fund of the Landesbanken and Girozentralen:
- Berlin-Hannoversche Hypothekenbank Aktiengesellschaft, Berlin;
- DEG Deutsche Investitions- und Entwicklungsgesellschaft mbH, Cologne;
- Deutsche Hypothekenbank (Actien-Gesellschaft), Hanover;
- Frankfurter Bankgesellschaft (Deutschland) AG, Frankfurt;
- Portigon, Düsseldorf;
- S Broker AG & Co. AG, Wiesbaden;
- Weberbank Actiengesellschaft, Berlin;
- Westdeutsche Immobilien Bank, Mainz
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