Guarantee and compensation funds  

Deposit banks and investment firms must ensure that they can repay or return customers’ deposits, funds and other financial instruments in accordance with the contract concluded. The Deposit Guarantee Fund and the Investors’ Compensation Fund have been established for situations where a deposit bank or investment firm is unable to meet its obligations because of insolvency.

Protection of depositors

The Deposit Guarantee Fund has been established to safeguard depositors in a situation where the deposit bank is not able to repay the customer’s deposits by itself. Apart from some exceptions, the maximum cover provided from the Fund for one customer in one bank is EUR 100,000.

Protection of investors

The Investors’ Compensation Fund repays investors’ assets and financial instruments in the event of service provider’s insolvency. If a Finnish credit institution or investment firm holds customer’s funds on behalf of the customer and cannot repay or return them, the Fund pays the customer a maximum compensation of EUR 20,000.

Protection of policyholders

Policyholders do not have a protection scheme comparable to the schemes specified above in the event of insurance company’s insolvency. Supervision of insurance companies’ financial position is also a means for safeguarding policyholders’ interests.

Foreign protection schemes

The Deposit Guarantee Fund only covers deposits placed with deposit banks authorised in Finland. Correspondingly, the Investors’ Compensation Fund only covers customer funds and financial instruments held by investment firms authorised in Finland.

Deposits, funds and financial instruments held by branches of foreign deposit banks and investment firms operating in Finland are subject to the cover schemes offered in their home member state. The level and scope of schemes can vary in across EU and EEA countries.

24 October 2011