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Old 20.06.2015, 23:05
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Bank account protection/guarantee

Does anyone know if in the event a bank collapsed, how much of your money is safe/guaranteed?

Is it a general rule or on a bank by bank basis?
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Old 20.06.2015, 23:07
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Re: Bank account protection/guarantee

Not sure about Switzerland but in several countries banks are members of a security "group" and your funds - depending on what your investment is - are safe up to a certain amount. In German the word is Einlagensicherungsfonds, different per bank, yes.
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Old 21.06.2015, 00:10
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Re: Bank account protection/guarantee

Ok so for Australua it's AU$250,000 http://www.canstar.com.au/term-depos...sit-guarantee/

But what is it here in Switzerland?
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Old 21.06.2015, 00:13
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Re: Bank account protection/guarantee

This doesn't sound good http://baselexpats.com/?p=184
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Old 21.06.2015, 00:53
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Re: Bank account protection/guarantee

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Ok so for Australua it's AU$250,000 http://www.canstar.com.au/term-depos...sit-guarantee/

But what is it here in Switzerland?
CHF 100k per person per bank.

Tom
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Old 21.06.2015, 01:06
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Re: Bank account protection/guarantee

I'm afraid it is up to 100k per person.
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Old 21.06.2015, 08:58
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Re: Bank account protection/guarantee

A very good summary http://moneyfacts.co.uk/guides/savin...ust180112/#EEA

Unfortunately does not list Switzerland.
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Old 21.06.2015, 09:18
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Re: Bank account protection/guarantee

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CHF 100k per person per bank.

Tom
Wishful thinking I'm afraid! Maybe 30K if you are lucky - in addition to everything else there is a cap per bank as well if memory serves it is about 9b. So spreading cash around in smaller banks has merit.

Alternatively investments are not impacted, so money market products might be an alternative to spreading deposits over a large number of banks. If you are holding large amounts of cash.
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Old 21.06.2015, 09:45
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Re: Bank account protection/guarantee

Here from FINMA, the overseer of the Swiss Banks . . .
https://www.finma.ch/en/enforcement/...ities-dealers/
And the 'big pot' is SFr 6 Billion.

Last edited by me.anon; 21.06.2015 at 09:55.
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Old 21.06.2015, 11:28
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Re: Bank account protection/guarantee

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Here from FINMA, the overseer of the Swiss Banks . . .
https://www.finma.ch/en/enforcement/...ities-dealers/
And the 'big pot' is SFr 6 Billion.
Any idea if the 6bn is a limit on the payout, or just a limit on the amount the banks pay collectively (the rest being made up by FINMA)?
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Old 21.06.2015, 20:21
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Re: Bank account protection/guarantee

So in summary (based on the text in the link I provide earlier ... read to the bottom to see the "edit" (see below))

The banks will guarantee up to 100K, providing the pot (6Bn) is not exceeded, after which things get "trimmed"

Probably makes sense to spread between here, UK and Australia.


******** text extract *********
On 15th October 2008 the Swiss government decided on a range of temporary measures to increase the security of bank accounts. These measures were put into force on 20th December 2008 and should be replaced by a permanent change of law by 31st December 2010:

- bank accounts are protected up to an amount of CHF 100,000 per bank and client

- 2nd and 3rd pillar accounts are treated separately and are also protected up to CHF 100,000 per bank and client

- the total pot guaranteed by all banks is increased from 4 to 6 billion francs
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Old 21.06.2015, 20:35
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Re: Bank account protection/guarantee

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. . .
Probably makes sense to spread between here, UK and Australia.
. . .
Or converts your assets into gold coins and bury them in your garden.
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Old 21.06.2015, 20:48
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Re: Bank account protection/guarantee

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Or converts your assets into gold coins and bury them in your garden.
Garden already full, so looking for alternatives!
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Old 21.06.2015, 20:54
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Re: Bank account protection/guarantee

And check what is covered by this. I think current and savings accounts are covered but not all types of investments / funds are covered by that!
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Old 22.06.2015, 01:52
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Re: Bank account protection/guarantee

Everything booked into your securities account is excempt from the guarantee because the bank can't do anything with these assets without your consent to begin with. These are "special assets" (Spezialvermögen) the bank holds on your behalf that, even in case of default, are (at least in theory) available immediately. One exception to that rule may be created by securities lending - I'm not sure, but I think that if you lend out your securities you most probably also take over the risk of the borrower becoming unable to return "your" securities if he goes bust. Another exception are Kassenobligationen, non-quoted notes with the bank as debtor that you buy from the bank directly - these also count towards the 100k.

So, the guarantee covers cash accounts only (Kontokorrent, Sparkonto, Pillar 3a unless it's in securites[in which case it's considered special assets], Freizügigkeitskonto, ec) plus Kassenobligationen (notes you buy from the bank with the bank as debtor), which by default are in creditor class three. However, for each individual for any given bank, the first 100k in cash accounts are up-classed into creditor class two (i.e. of higher priority). If you have 200k in cash, 100k each at bank A and bank B, then both are covered.

When a bank goes bust, creditor class one (salaries, essentially) gets paid. From whatever's left creditor class two is paid, which by default consists of demands by all forms of social security but in case of a bank also includes every customer's first 100k. Now, if there are not enough assets left, the 6bln fund comes into play and pays what's needed (until it's empty, in which case the monies are spread proportionately among the claim holders). All other deposits are not covered by the guarantee fund.

But the fund is limited to 6bln total. So if bank A and bank B go bust, they both suck from the same 6bln. The fund only gets replenished after the given bankruptcy case has been closed, which can easily take 10-20 years or more. If the fund is emptied, swiss government is to fill the gap - though I'm not sure if this is granted or merely expected (implicit guarantee).

Additionally, and indepent from the federal guarantee fund, for most Kantonalbanken the kantonal government guarantees for all deposits (VD, BE, GE are the exceptions, they have either no or only limited guarantee). So, banking with these adds an additional layer of security. And usually they're considerably cheaper than UBS and CS, to boot.

P.S.:
Is "creditor class" the same as "Gläubigerklasse"? It describes a creditors' spot in the queue which determines who will be paid out before him or after. For instance, junior bonds are in a lower class than senior bonds, share capital is in the lowest class, salaries are classed topmost. Either way, creditor class is what I've used here.

Last edited by Urs Max; 22.06.2015 at 02:06.
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Old 22.06.2015, 09:11
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Re: Bank account protection/guarantee

Thanks Urs Max for a very detailed and what appears to be a well informed post.

So in summary if one had 250K, they should minimum spread this between 3 banks?
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Old 22.06.2015, 09:38
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Re: Bank account protection/guarantee

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Thanks Urs Max for a very detailed and what appears to be a well informed post.

So in summary if one had 250K, they should minimum spread this between 3 banks?

If "one had"? Do I have to pretend to be hypothetical or should I assume you have 250 large ones?


To answer your question I would recommend spreading it over multiple banks or saving accounts.
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Old 22.06.2015, 10:35
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Re: Bank account protection/guarantee

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If "one had"? Do I have to pretend to be hypothetical or should I assume you have 250 large ones?
.
Alas due to buying large quantities of gold and burying it in my garden, my cash reserves a little low at the moment!
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Old 22.06.2015, 14:50
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Re: Bank account protection/guarantee

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Alas due to buying large quantities of gold and burying it in my garden, my cash reserves a little low at the moment!
Where exactly in Basel are you ?
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Old 22.06.2015, 14:56
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Re: Bank account protection/guarantee

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Alas due to buying large quantities of gold and burying it in my garden, my cash reserves a little low at the moment!
250k wouldn't buy you large quantities of gold - just half of one of those cool looking 400 oz bars you see in the films.

Better make sure you remember where you buried it
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