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Questions that you might ask or that others might ask you
Principle: Is my bank covered by the deposit guarantee ?
b) Am I covered by my bank, which is a branch of a
foreign-based institution ?
Is on-line banking covered ?
If my bank goes bankrupt, how much is
If I find out that my bank has closed, what
should I do ?
How are joint accounts repaid ?
Are all my deposits taken into account
I also have securities. How would I be
reimbursed and in what proportion ?
For my securities, what do you guarantee
If my bank closes, what does the Fonds
de Garantie des Dépôts do ?
When does the Fonds de Garantie des
Dépôts pay me the compensation to which I am entitled ?
Am I entitled to contest the compensation
payment offered ?
What should I do about amounts not
included in the compensation ?
Does the Fonds de Garantie des
Dépôts have the necessary funds to cope with any banking failure
What is the Commission Bancaire in
comparison to the Fonds de Garantie des Dépôts ?
What relationships exist between the
Fonds de Garantie des Dépôts and the financial authorities
1. Is my bank covered by the deposit guarantee ?
a) Principle: The principle is simple: all credit institutions approved
by the Comité des institutions de crédit et des entreprises
d'investissement (French Committee for credit institutions and investment
companies - CECEI) automatically have to be members of the Fonds de
Garantie des Dépôts (French Deposit Guarantee Fund). Depending on the
individual approval, it may benefit from one or more types of guarantee
(cash, securities or warranties).
Note that the security guarantee procedure, when relating to custodians
of securities belonging to third parties, includes not only credit
institutions but also investment companies approved in France, agents
authorised by the Conseil des Marchés Financiers (French Financial
Services Authority) for custody and administration of financial
instruments and members of compensation chambers.
Please refer to the list of member institutions of the Fonds de
Garantie des Dépôts broken down by type of guarantee "cash guarantee", "securities guarantee" and the "warranties guarantee".
b) Am I covered by my bank, which is a branch of
a foreign-based institution ?
If the head office of your institution is located outside the European
Economic Area (see list of countries of the
European Economic Area), its French branch, which must be approved by
the French authorities, is included in the French guarantee procedure.
However, if the institution has its base in a state belonging to the
European Economic Area, the procedure applicable to its branch is in
principle the current procedure of that country.
In any event, the institution with which you intend to open an account
must notify you of the guarantee system(s) to which it belongs.
2. Is on-line banking covered ?
The guarantee procedures apply to all institutions regardless of the
process by which business is conducted.
If an already approved traditional bank launches a website, it does not
have to complete any further formalities as far as regulations are
concerned. Transactions processed via its website are automatically
covered by the guarantee procedure.
However, a new bank wishing to trade exclusively on the Internet must
obtain an approval in advance from the authorities responsible for its
head office if this is located in a state belonging to the European Economic Area The guarantee
procedure applicable to cash deposits and securities is that of its head
If the bank's head office is located outside the European Economic Area,
it must obtain prior approval from the French authorities (CECEI) if its
website is aimed at business in France. The bank will therefore
automatically be a member of the Fonds de Garantie des Dépôts.
It is therefore essential for an Internet customer to establish - in the
legal information section of the website of the bank concerned - the
guarantee applicable to deposits and securities held on his/ her behalf
by the bank. It might be helpful to look at the location of the head
office (see see list of members of the
guarantee procedures for deposits, securities and warranties).
3. If my bank goes bankrupt, how much is guaranteed ?
Compensation in the French system amounts to €70,000 per customer
cash deposit and up to €70,000 per investor of securities.
Compensation is much less in most other countries of the European
Economic Area (such as the Netherlands, UK, Luxembourg, etc.), where it
is close to €20,000.
The maximum limit is established for each depositor or investor, applying
to all deposits or assets, net of liabilities due, belonging to the same
depositor or investor with the same member institution, regardless of how
many accounts there are, the location in the European Economic Area or
the currency concerned, provided that it is denominated in a currency of a State of the European Economic
Compensation payments are also subject to some exceptions that normally
do not apply to most customers of a financial institution (for these
exceptions refer to regulations nos
99-05, 99-12, and 99-14).
4. If I find out that my bank has closed, what should I do ?
Your accounts are stopped, in particular your current account, and
payment methods provided by this bank do not work. You should take all
necessary steps to open an account with another bank as soon as
possible. The Fonds de Garantie des Dépôts should generally be
in a position to pay (see question 9) the compensation
due to you quickly.
Initially, you do not have to take any action with regards to the
Fonds de Garantie des Dépôts (see question 10).
5. How are joint accounts repaid ?
The share of each depositor in the total value of the joint account is
taken into account for determining the maximum limit of €70,000. Unless
otherwise stated, the account is split evenly between the two depositors.
Thus, a customer with a personal account showing a credit balance of
€30,000 and a joint account with his/her partner, or any other person,
showing a credit balance of €78,000 would be entitled to receive from the
Fonds de Garantie des Dépôts, in the event of default by his/her
€30,000 + (€78,000: 2) = €69,000
His/her partner, assuming that he/she has no other credit, would be
entitled to €39,000 (i.e. €78,000: 2).
6. Are all my deposits taken into account ?
All types of deposits that a customer may have under normal circumstances
are included such as current account deposits, deposit account balances,
passbook accounts, and property purchase savings accounts. The relevant
laws nevertheless exclude certain items, depending on the professional
nature of the customer or the type of deposit or investment.
For the list of excluded deposits and securities (see egulations no.
99-05, art. 3 99-05-art. 3,
99-12-art. 2 et 99-14-art. 3).
Note that deposits in a currency of a country not belonging to the
European Economic Area, like the dollar or the yen, are exclude (see the
list of countries of the European Economic
7. I also have securities. How would I be reimbursed and in what
The investment guarantee comes into play on request from the Commission
Bancaire (French banking commission) whenever an agent or holder of
securities is not in a position to return them to the customers to whom
Consequently, as soon as the shortfall is established, the securities
still held by the agent are allocated to the owners of the securities in
proportion to their holdings.
The Fonds de Garantie des Dépôts compensates the customers for the
securities or financial instruments, which they have lost, based on the
market value on the date they ceased to be available. This date is set by
the French banking commission, at the time it requests the engagement of
the Fonds de Garantie des Dépôts. Compensation is paid by cheque,
bank transfer or equivalent financial instruments for the identical
market value, if the customer has accepted such means of payment, offered
to him/her by the Fonds de Garantie des Dépôts.
Customers have a period of 15 days to contest the compensation and/or
accept the offer of securities compensation.
8. For my securities, what do you guarantee ?
Securities normally held by customers (shares, debentures, units in unit
trusts etc.) are guaranteed, but as for the "cash guarantee" procedure,
French law (see article L 322-1
of the Code Monétaire et Financier(Monetary and Financial
Code) excludes securities deposited by certain parties from the
securities guarantee due to their type, the information they hold
concerning the company's situation or particular advantages granted to
them. Some securities are also excluded due their specific nature or
These exclusions are listed in CRBF Regulation no. 99-14, art. 3
9. If my bank closes, what does the Fonds de Garantie des Dépôts
A few days after the closure of the institution, of which you will
normally be made immediately aware via the press, the Fonds de
Garantie des Dépôts will send you a general information letter. Then,
as soon as the analysis of all your accounts has been performed based on
accounting documentation of the bank, you will receive a registered
letter stating the amount of compensation proposed. This compensation
will have been calculated in accordance with CRBF regulation nos 99-05 and 99-14 applying to the balance on your
accounts at the date when your deposits or securities ceased to be
available, this date being set by the French banking commission.
After verifying your identity, the Fonds de Garantie des Dépôts
pays you the funds (by cheque or by bank transfer) once it has received
your agreement to the amount proposed. Nevertheless, you have a period of
15 days to contest it (see Q. 11).
10. When does the Fonds de Garantie des Dépôts pay me the
compensation to which I am entitled ?
According to the law, it must make the payment within 2 months. However,
this deadline can be postponed up to three times by the French banking
commission. The Fonds de Garantie des Dépôts makes every effort to
pay the compensation to as many customers as possible as quickly as
possible. Indeed, one of its main benefits is the speed with which
compensation is paid. If the relevant accounting documentation is
available, the first compensation payments can generally be made one week
after the closure of the bank.
11. Am I entitled to contest the compensation payment offered ?
You may contest the compensation payment offered by registered letter
within 15 days. If the Fonds de Garantie des Dépôts accepts your
comments, payment occurs as soon as possible. You are also entitled to
take legal proceedings following this amicable claim period; in this
case, payment will not be made until the litigation is complete.
12. What should I do about amounts not included in the compensation ?
There are two categories of deposits that may not be included :
If amounts are excluded because their type falls
outside the scope of compensation (e.g. deposits in non-EU currencies),
you are a creditor of the bank and you must declare these amounts
directly to the creditors' representative appointed by the commercial
court; the Fonds de Garantie des Dépôts will notify you in
advance of the amounts in question and the procedures to follow.)
If amounts are not included because they exceed
the maximum compensation limit, the Fonds de Garantie des Dépôts
makes the declaration itself to the creditors' representative and you
do not have to make any declaration. The Fonds de Garantie des
Dépôts will notify you of all amounts
13. Does the Fonds de Garantie des Dépôts have the necessary funds
to cope with any banking failure ?
The law requires all member institutions to provide the necessary funds
to enable the Fonds de Garantie des Dépôts to meet its objectives.
The level of funds is established by regulations and the amount of the
contributions cannot be allowed to endanger the banking sector as a
The Fonds de Garantie des Dépôts may also borrow and grant
14. What is the Commission Bancaire in comparison to the Fonds de
Garantie des Dépôts ?
The Commission Bancaire (French banking commission) is the supervisory
body for the banking sector. It may also penalise individual institutions
or directors who do not respect the regulations.
The Fonds de Garantie des Dépôts is a legal entity under private
law and is independent of the French government; its funds come from
members' contributions. It compensates depositors in the event of the
closure of a member institution or it is engaged in advance for
preventive purposes (see Q 1 and Q 2 ).
The law provides for a range of regulations governing the relations
between the French banking commission and the Fonds de Garantie des
Dépôts. Firstly, it is the French banking commission that decides to
close an institution or that proposes the engagement of the Fonds de
Garantie des Dépôts in a preventive capacity and notifies the
Fonds de Garantie des Dépôts. The law also provides for an
exchange of information between the French banking commission and the
Fonds de Garantie des Dépôts.
15. What relationships exist between the Fonds de Garantie des
Dépôts and the financial authorities ?
The Fonds de Garantie des Dépôts - legal entity under private law
- enjoys close relationships both with the Comité des Etablissements de
Crédit et des Entreprises d'Investissement (Committee for Credit
Institutions and Investment Companies -CECEI) and the French banking
commission owing to the nature of its legal duties.
In this respect, the Chairman of the Management Board of the Fonds de
Garantie des Dépôts is automatically a member of the CECEI (article 612-3 of the Code Monétaire et
Financier). Since the CECEI's principal duty is to issue and
withdraw approvals, the presence of the Chairman of the Management Board
of the Fonds de Garantie des Dépôts helps to strengthen the need
to prevent difficulties arising during the decision process for granting
approvals to institutions.
In addition, the French banking commission, the banking supervisor with
the power to impose penalties on its members, will consult the Chairman
of the Management Board of the Fonds de Garantie des Dépôts on all
questions relating to an institution for which it plans to engage the
Fonds de Garantie des Dépôts or for which it plans to propose its
engagement in a preventive capacity.
The Chairman of the Management Board, in turn, may request a hearing with
the French banking commission (see L 613-34 of the Code monétaire et
financier). In addition, the French Finance Minister, the
Governor of the Banque de France, the Chairman of the French
banking commission, the Chairman of the Conseil des Marchés
Financiers or their representatives may be heard by the Supervisory
Board and the Management Board (see L 312-13 of the Code Monétaire et
In the performance of its duties, the Fonds de Garantie des Dépôts
is authorised both to request information from and to provide information
in its possession to the Banque de France, the CECEI, the French
banking commission, the Conseil des Marchés Financiers, the
COB (French stock exchange commission) and other institutions (see
article L 631-1 of the Code
Monétaire et Financier).