In Austria, too, deposit insurance is based on a model that provides for corresponding protection areas into which the member banks make regular deposits. Austria is thus also implementing the European Union directives on the protection of customer deposits in the event of a bank's insolvency accordingly. Similar to Germany, deposit insurance in Austria is regulated by law, and the relevant guidelines can be found in the Banking Act in sections 93 and 103. In simple terms, it can be said that this paragraph imposes an obligation on every credit institution domiciled in Austria to belong to at least one of a total of five deposit insurance associations. These trade associations, in turn, manage the corresponding deposit insurance funds.
The five Austrian trade associations are:
- Deposit insurance for banks& Bankiers GesmbH as a professional association of banks and bankers.
- Hypo-Haftungs-GesmbH as the professional association of the regional mortgage banks.
- Sparkassen-Haftungs-AG as a professional association of the savings banks.
- Österreichische Raiffeisen Einlagensicherung eGen as a professional association of Raiffeisen banks.
- Schulze-Delitzsch-Haftungsgenossenschaft eG as the professional association of Volksbanks.
The superordinate body of each of these professional associations is the Austrian Federal Economic Chamber. It supervises the work of the associations and sets the corresponding regulations. Each professional association in turn maintains its own security facility. In Austria, membership in a professional association is a legal requirement for every credit institution that is authorized to accept deposits from customers that are subject to the corresponding security requirements.
For deposit insurance of customer funds in Austria, it doesn't matter whether they are in an interest-bearing or non-interest-bearing account or. Savings book are. The account can be a salary account, a savings account, a time deposit account or an overnight deposit account. However, it is mandatory that the balance be maintained either in euros or in a currency of a member state of the EEA (European Economic Area). Thus, the deposit insurance in Austria includes all currencies of the European Union, as well as the currencies of Norway, Iceland and Liechtenstein. The latter also means that the Swiss franc is covered by the Austrian deposit insurance scheme (it is the national currency in Liechtenstein), although Switzerland is not a member of the European Economic Area.
When does the deposit insurance in Austria come into force and the investors are compensated?
Investor compensation under the Austrian deposit insurance scheme always comes into effect when a court declares a credit institution bankrupt. However, even if the Austrian Financial Market Authority orders a suspension of payments or a court orders the business supervision of a credit institution, the deposit guarantee comes into effect.
If the case of indemnification occurs in Austria in a professional association, the latter is obliged to arrange for the payment of the claimed amount to an account specified by the investor within a maximum period of 20 working days. An extension of this period to 30 days is possible if there are exceptional circumstances. Furthermore, the law stipulates that so-called small investments and social hardship cases are to be treated and processed preferentially. Small investments are understood to be legitimate accounts with savings balances of up to 2.000; hardship cases are people who can demonstrably no longer meet their living costs without the savings deposit.
It should be noted that payment in the event of compensation is made exclusively in the currency of the euro. This also applies if the savings balance was previously held in a foreign currency account. In such a case, the exchange rate valid on the day on which the credit institution in question went bankrupt shall be used as the conversion rate.
How high is the deposit insurance in Austria?
Deposit insurance in Austria is legally guaranteed at an amount of 100.000 euros per account holder and bank set. On joint accounts this amount doubles to 200.000 euros. It does not matter whether the account holder is a natural person or a legal entity.
Some formal rules are prescribed for the receipt of investor compensation. For example, when claiming investor compensation under a savings account, it is mandatory that the account be presented to the appropriate protection agency in order to receive the appropriate compensation. Current accounts and other accounts must be legitimized by the account holder, otherwise the deposit guarantee does not apply. The protection of savings deposits includes both the current account balance and the interest payable until the bank becomes insolvent.
Incidentally, there is no legal requirement in Austria that the account holder must be a local citizen in order to benefit from the deposit guarantee scheme. Thus, deposits of foreign account holders are also protected by the Austrian deposit insurance, provided that the credit institution has its headquarters in Austria. Unlike other deposit guarantee schemes, there is no deductible with the Austrian deposit guarantee scheme. This means that in the event of compensation, the entire balance is paid out to investors up to the maximum amount stipulated by law.
Relationship between the professional associations
Another peculiarity of the deposit insurance system in Austria is that both the individual professional associations and all association members have a relationship with each other and are thus entitled to provide financial support to an association member in financial difficulties. The whole thing works by asking the other members of the trade association in question to contribute a corresponding share, so that the credit institution concerned can refund customer deposits in full. If the shares contributed are not sufficient for this purpose, corresponding contributions can also be made across all associations. One looks for such flexibility in vain in many other compensation institutions.
The whole thing is put into perspective, however, when one considers that the participation of the professional associations is limited to a maximum of 50 percent each.000 euros per depositor. Nevertheless, there is also a solution here, which in the event of an emergency, the Austrian Federal Minister of Finance will be called to account. It is obliged to bear the difference within the framework of the statutory deposit guarantee scheme. Thus, the security of customer deposits in Austria is guaranteed not only by the professional associations, but also by the state – i.e. the Republic of Austria.
If deposits of more than 100.000 Euro is also secured?
Through the statutory deposit protection, savings balances of more than 100.000 euros in individual accounts or. 200.000 euros in joint accounts are not covered in Austria. However, the customer has the option, in the case of a credit balance of more than 100.000 or. 200.000 Euro in the context of insolvency proceedings to register his claims against the bank, u. U. with the responsible insolvency administrator. The principle continues to apply: if, in addition to the credit balances, there are also liabilities of the customer to the bank (z. B. by loans taken out and not yet fully repaid), savings deposits and liabilities are initially offset against each other in the event of indemnification. Only the calculated difference is then paid out.
Information on the deposit protection funds of the individual trade associations in Austria:
The work and the guarantee conditions with regard to the deposit insurance of the individual professional associations in Austria differ partly clearly. The following is the most important information on each individual deposit association:
Deposit insurance for banks& Bankers GesmbH
The oldest and best-known system of security is operated in Austria by the Professional Association of Banks& Bankiers GesmbH operated. Which credit institutions are members of this association and thus fall under the protection of the corresponding deposit insurance scheme can be found on the website www.deposit insurance.at can be read up. In addition, a corresponding public notice is posted in each bank affiliated to the system, drawing attention to the membership. When opening an account in Austria, the customer must also be informed of the deposit guarantee scheme responsible for him.
A special feature of all professional associations for deposit protection in Austria is that foreign banks can also become members here. However, the legal form of the respective bank must allow it, resp. it must comply with the required conditions. However, the protection of deposits is then based on the conditions in the home country of the foreign institution. This means that if the maximum amount is less than 100.000, the Austrian professional association to which the credit institution is affiliated also guarantees only the lower amount.
Hypo-Haftungs-GesmbH
This is the Association for the Deposit Protection of the Regional Mortgage Banks. The associated credit institutions used to specialize in building society contracts and home loans, but in recent years they have developed into universal banks for both companies and private individuals. Consequently, these credit institutions also require corresponding deposit insurance systems. The special thing about it is that the deposit insurance of the regional mortgage banks constantly monitors the economic development of their member companies and checks this. This has created a kind of early warning system to detect banking crises before they break out, if possible.
The Savings Banks Liability Ltd
Similar to Germany, Austria also has a separate association for savings banks with the purpose of securing customer deposits. In Austria, the Sparkassen-Haftung AG is responsible for this. A special feature of the savings bank system is that loans extended to customers are almost completely covered by the customers' deposits. This makes the savings banks in Austria independent of developments on the international financial markets. Experts therefore consider the financial risk for investors who have deposited capital with an Austrian savings bank to be very low.
Austrian Raiffeisen Deposit Guarantee eGen (ÖRE)
The Raiffeisen banks also have their own professional association in Austria. The associated deposit guarantee applies to all banking products of the Raiffeisen banks, for example savings books, savings cards, salary accounts, pension accounts, current accounts, building society savings and time deposits. The so-called Raiffeisen online savings scheme is also covered by the deposit protection scheme. A special feature of the Raiffeisen banks in Austria is that, in addition to the mandatory statutory deposit insurance, they also operate their own private deposit insurance scheme. This is the Raiffeisen-Kundengarantiegemeinschaft Österreich (Raiffeisen Customer Guarantee Association Austria) – or RKÖ for short. This is understood to be a voluntary deposit insurance scheme, but over 80 percent of all Austrian Raiffeisen banks are now affiliated to it. Thus, at Raiffeisen banks, even amounts higher than 100.The deposit guarantee scheme of the Raiffeisen banks in Austria is not limited to the legally required deposit guarantee and therefore does not cover the entire amount of EUR 000.
Schulze-Delitzsch-Haftungsgenossenschaft eG (SDH) as a professional association of Volksbanks
This professional association for deposit insurance in Austria got its name from the German politician, jurist and reformer Hermann Schulze-Delitzsch. The 19. The economist, who lived in the nineteenth century, was one of the founders of the Volksbanken in Germany and thus became world-famous. Within the framework of this trade association, too, there is both the legally required deposit guarantee and an additional voluntary guarantee. For this purpose, the Volksbanks in Austria maintain their own joint fund, which is, so to speak, upstream of the statutory deposit guarantee scheme. In concrete terms, this means that in the event of a crisis, investors are first compensated from the institution's own fund before the assistance of the statutory deposit insurance scheme is called upon.
Conclusion
Deposit insurance in Austria consists of a sophisticated system, which is not inferior to that in Germany. The statutory health insurance is divided into five stable pillars, in addition, individual banking associations maintain their own voluntary deposit insurance systems. Austria thus meets the protection standards set by the EU and in some cases even exceeds them significantly.