Private Banking Sector Deposit Protection

The Private Banking Deposit Protection Scheme consists of two compensation funds or schemes existing in parallel in conjunction with the Auditing Association of German Banks.

The German Banks' Compensation Scheme (Entschädigungseinrichtung deutscher Banken GmbH - EdB) is contributed by the private banking sector's statutory protection mechanism. It is the legal entity representing a protection fund fed by compulsory contributions from all private deposit banks. Under the Deposit Guarantee and Investor Compensation Act – with some exceptions – a maximum customer deposit sum of up to 100,000 EUR is protected ("basic cover").

The Deposit Protection Fund (Einlagensicherungsfonds - ESF) constitutes the second private banking industry line of protection - albeit established voluntarily on the basis of private law. It protects member banks' non-bank deposits, which are not covered by the EdB up to a ceiling amount fixed individually for each bank ("follow-up cover"). Further information is available on the Federal Association of German Banks (Bundesverband deutscher Banken e.V. (BdB) website.

The role of the Auditing Association of German Banks (Prüfungsverband deutscher Banken e.V.) in its audit capacity is to limit potential risk and to prevent, where possible, any recourse to either compensation scheme at all.