Deposit guarantee limit increased to EUR 50,000
The Government has submitted a proposal to Parliament to increase the deposit guarantee limit from EUR 25,000 to EUR 50,000. The proposal involves amending the Act on Credit Institutions to allow the Deposit Guarantee Fund to protect customers' deposits for EUR 50,000 instead of the current EUR 25,000 if a deposit bank becomes insolvent. The higher guarantee limit would become effective as of 8 October 2008.
Finnish branches of foreign banks belonging to the Deposit Guarantee Fund will be increased to EUR 50,000. Branches of banks belonging to the European Economic Area (EEA) are eligible for additional coverage where the deposit protection scheme in the home country is lower than the Finnish guarantee limit. In such cases the additional coverage comprises the maximum guarantee limit offered by the home state supplemented with the difference to meet the EUR 50,000 limit. The Deposit Guarantee Fund can approve additional coverage applications from foreign bank branches effective as of 8 October 2008.
The proposed changes would augment the volume of deposits covered by a deposit guarantee by around EUR 8 to 9 billion.
Inquiries: Mr Seppo Tanninen, Legislative Counsellor, tel. 358 (0)9 160 33096.