This is a question you have asked yourself at least once in your life. What would happen in case of bank failure or bank run in english ? What happens to your savings on the livret A or your money on your current accounts? Rest assured, in the event of a disaster scenario, there is a government agency, the FGDR (Deposit Guarantee and Resolution Fund), that will reimburse you.
Livret A, current accounts: what is the protection of the French in case of bank failure?
The French are just as afraid of a bank failure as the banks themselves! Here’s what just happened on Friday, March 10 for the Silicon Valley Bank (SVB)a bank for American start-ups.
Indeed, this bank fell into the vicious circle. Bad news is circulating about his condition, worrying customers. They decide to withdraw all their money. Given the massive requests, the bank is unable to respond to customers due to a lack of liquidity. As a result, it is forced to sell assets at a loss. This action accentuates his difficulties, which are called a solvency crisis.
Moreover, the problem in situations like this is that other banks can also become infected in turn and lead to a more general crisis.
Do not panic, this situation of bank failure is not current in France. French banks not run any risk as a result of the bankruptcy of the SVB”, Elisabeth Borne declared in the Senate on March 15. There are safeguards to avoid these scenarios. In France, bank deposits are guaranteed through a public service, the FGDR, created in 1999. In case of problems, theorganization reimburses customers within seven working days. Something to inspire confidence!
A total refund for Booklet A, LDDS, LEP in case of bank failure
In the event of a bank failure, keep in mind that the savings you have on a booklet A, an LDDS or a LEP are fully covered. For the current accountsyou will be reimbursed up to 100,000 euros. The same applies to regular savings accounts, the Livret Jeunes, the home savings plan, etc.
“Within days of your bank going bankrupt, we would open a secure space on the internet for its customers where you would need to register and provide your new bank account number so that we can pay the fee.”explains Thierry Dissaux, President of the FGDR.
Important Info: This is 100,000 euros per individual, not per family, but also per bank. But beware, if you have a Hello Bank and BNP Paribas account, it’s the same group, so a total of 100,000 euros on both accounts.
On the other hand, keep in mind that most online banks have their own banking license and belong to the FGDR on their behalf. As is the case with Boursorama, Fortunéo or Monabanq, subsidiaries of other banks. For example, if you have money with Fortuneo and Crédit Mutuel Arkéa, the parent company, your money is covered up to €200,000, or €100,000 on both sides.
“If your bank is foreign but located in the European Economic Area, for example the German N26 or the Lithuanian Revolut, then you are not subject to the FGDR. It is the German or Lithuanian fund that will cover you globally in the same way”informs Mr. Dissaux.
What about other solutions where you can have money
And about apps Lydia of Nickel ? “These institutions cannot be members of the FGDR. However, they have to deposit their customers’ money in a special account at a bank. If it is the payment institution that goes bankrupt, customers will have to be reimbursed by the liquidator based on the specific account, but the procedure may take longer and be less controlled. »says Mr. Dissaux.
The FGDR also compensates for the “ titres ». “But compensation only takes place if the title has disappeared, due to fraud or a major computer failure that would lead to the bankruptcy of the established order. In other cases, the title has not disappeared, you remain the owner and you do not have to compensate.says Mr. Dissaux, who also indicates that cryptocurrencies are not covered by this type of protection.
To conclude, the FGDR also reimburses life insurance. The Private Insurance Guarantee Fund takes over. The reimbursement is limited to 70,000 euros per person and per insurance group. We hope this article about protection in case of bank failure has put your mind at ease!