The current mechanism for the protection of depositors in the banking system is not an absolute novelty in Italian system. Indeed, since 1978, the Central Fund for the Guarantee of Rural and Artisan Banks was founded on a voluntary basis, the first example in Italy of a Deposit Guarantee Scheme (also known as DGS, the English acronym of Deposit Guarantee Scheme) mutual support between banks (also called IPS, Institutional Protection Scheme), and in particular on those values ??of solidarity and mutual assistance that harmonize the co-operative movement and constitute its peculiarity.
The primacy of the cooperative movement in this field, however, determined a "competitive" inferiority situation for other banks in the system. In order to overcome this situation, about ten years later (nel 1987) the Interbank Deposit Protection Fund was established, which secured the deposits of Italian credit institutions voluntarily associated to it, with the exception of the Rural and Artisan Banks, which they did not participate because they already had a specific guarantee mechanism.
The Central Guarantee Fund, with structure and organization different from those of the Interbank Deposit Guarantee Fund, actually had a much wider function than the latter.
Indeed, while the Interbank Fund was essentially designed to resolve irreversible crises of member banks, the Central Guarantee Fund, due to the solidarity nature of the cooperative movement, could also provide financial and capital funds to Banks in temporary difficulties.
After the useful experience of the Central Cooperative Credit Guarantee Fund, documented also on a prestigious magazine such as the Journal of European Economic History, on March 14th, 1997, the current Deposit Guarantee Fund of the Cooperative Credit (in brief FGD) was established (in brief FGD), on the initiative of Federcasse and with the initial participation of 362 Cooperative Credit Banks.
FGD found its legitimation, since its birth, in the transposition of Directive n. 19 of 1994 of the European Economic Community, which established the mandatory establishment of bank deposit guarantee mechanisms in the Member States. The Fund was therefore authorized by the Bank of Italy on February 26th, 1997, since its Statute and its Rules of Procedure was already compliant with the principles of Community law.
However, the mentioned Community Directive substantially restarted the guarantee institution with respect to the system in force until then, introducing the criterion of the protection of the depositor rather than the bank deposit. In particular, the 1994 Directive introduced the principle that mechanism of protection applies to all the deposits held by the depositor and not to each deposit individually
The ultimate purpose of this rule was to avoid discrimination in the protection of depositors in the presence of a strong fragmentation of banking relationships.
The instrument of guarantee mechanism, as outlined by the Community legislature more than 20 years ago, was a fundamental way of strengthening the stability of the banking system and of depositors’ protection, ensuring a harmonized level of deposit guarantee, even if only minimal, valid throughout the European Community. Moreover, due to the mandatory association to the mechanisms of protection by all the banking in the member countries, has proved to be effective in improving and stabilizing the structure of the internal financial markets, and has been also a prerequisite for the creation of a unique banking market at European level.
The Community principles regarding banking system guarantee mechanisms were therefore at the time transposed into Italian law by the Legislative Decree of 4th December 1996, n. 659, which explain rules for the "transposition of Directive 94/19 / EEC on Deposit Guarantee Schemes".
The decree's scheme relied on the general approach and the organizational guidelines in the aforementioned directive, setting the limits and characteristics of the guarantee schemes, but at the same time introducing principles integrating and extending the scope of Community rules.
The main features of the rules introduced by the aforementioned legislative decree, and in many ways still valid today, are as follows:
- the participation in a depository guarantee system established and recognized in Italy represents not only an obligation but also an indispensable condition for the activity of banking;
- in particular, the failure to join a guarantee scheme leads to the withdrawal of the authorization of banking activities by the authorities that issued the authorization;
- the financial resources necessary to pursue the purposes of the guarantee schemes are provided by the associated banks;
- it is left the option of providing further cases and forms of intervention (eg initiatives to support recovery operations, the transfer of assets / liabilities of bank companies under liquidation, etc.);
- Funds acquired by banks with a restitution obligation in the form of deposits or in another form, as well as circular checks and other similar credit facilities are eligible for repayment (the types of funds excluded from repayment are also specified in detail) ;
- the minimum threshold of the amount to be reimbursed, at the time equal to the equivalent of 20,000 Euros (approximately 40 million of Italian Lire), is determined;
- significant regulatory and authorization powers are granted to the Bank of Italy.
All the rest is recent history, with the launch of the new EU Directive No. 49 in 2014, within the Banking Union project which, among other things, has now standardized the standard guarantee value at European level at 100,000 Euro. This limit was introduced to reconcile the need to ensure an effective level of protection for small depositors across Europe, with the willingness of not encouraging simultaneously those risky and opportunistic behaviors that would arise from the expectation of a full coverage of any future losses.
This new Directive, also called DGSD, has been transposed into Italian system by Legislative Decree 30/2016, published in the Official Journal on 8th July 2016, which modified and supplemented the rules contained in the Single Banking Text (TUB) on Deposit Guarantee
The main features of the current arrangement, resulting from the approval of the aforementioned decree no. 30/2016, are summarized in the form of questions and answers in the section of this site calledFrequently Asked Questions”.