The Austrian Deposit Guarantee Scheme
According to the Austrian Banking Act, each of the five banking associations that represent the Austrian banking industry – the joint stock banks, saving banks, rural co-operative Banks (Raiffeisenbanken), commercial co-operative banks (Volksbanken), and mortgage banks – has to maintain a guarantee scheme. Every credit institution in Austria which accepts deposits is under a statutory obligation to be member of the guarantee scheme of the association it belongs to.
As of 1 January 2010 the deposits of natural persons are guaranteed up to a maximum amount of EUR 100,000 per depositor. Upon initiation of a business relation, the depositors must receive written information about the guarantee scheme and the amount and scope of coverage.
The guarantee scheme requires its member institutions to pay proportionate contributions immediately in cases where guaranteed deposits are to be paid out (= ex post funding).
In order to limit the contributions the guarantee scheme only has to provide for 50.000 EUR per depositor, the residual amount is to be covered directly by the Austrian Minister of Finance.
If the guarantee scheme in question cannot pay out the deposits, the other associations are obliged to make contributory payments without any delay in order to cover the missing amount.
If all Austrian guarantee schemes were unable to pay out the guaranteed claims, the one guarantee scheme that had been affected first, has to issue bonds for which the Austrian Minister of Finance may assume liability.
In addition to paying out deposits subject to guarantee obligations, the guarantee schemes may also contribute to the reorganisation of financially distressed institutions.
Currently the relevant EU Directive on Deposit Guarantee Schemes is being renegotiated, so changes in the Austrian system are to be expected in the near future.