Along with the supervisory activities and the lender of last resort function, deposit guarantee is one of the basic elements of the safety net, which is aimed at the stability of the banking system.
Through deposit guarantee, the social function of savings and the monetary function of bank intermediation are recognised and supported, and in the event of a bank failure, traumatic effects on depositors may be avoided.
Protection is offered to the so-called "unaware (or not sophisticated) depositor", who, having no access to needed information, may not be able to evaluate the risk position of the financial institution where his or her deposits are kept.
Deposit guarantee schemes are regulated under Directive 94/19/EC of 30 May 1994, amended by Directive 2009/14/EC of 11 March 2009 as regards the coverage level and the payout delay.
The Italian legislator implemented the Directive 94/19/EC with the Legislative Decree n. 659 of 4 December 1996 and the Directive 2009/14/EC with the legislative decree n. 49 of 24 March 2011, effective from 7 May 2011.
The legislative decree n. 49 of 24 March 2011 provides for the application of a maximum level of guarantee equal to 100,000 euro and a 20 working days payout limit, which may be extended by the Bank of Italy only in exceptional circumstances for a further 10 days. The payout limit starts from the compulsory administrative liquidation of the bank in accordance with article 83 of the legislative decree n. 385 of 1 September 1993. (Italian Banking Law)
The Interbank Deposit Protection fund also compensates, up to the limits set forth in the Statutes, the depositors of members, foreign branches in Italy of EU and non- EU banks, provided that they are members of the Fund.
According to the Statutes of the Fund (Article 27 paragraph 1) and pursuant to the Banking Law, claims eligible for reimbursement are those relating to repayable funds acquired by the members, in Euros and in foreign currency, in the form of deposits or in other forms as well as bankers drafts and equivalent instruments.
Article 96-bis of the Italian Banking Law, as amended by the legislative decree n. 49 of 24 March 2011, is as follows. Article 27 of the Statutes of FITD conforms to it.
Art. 96-bis (Interventions)
1. Guarantee schemes shall make payments in cases of compulsory administrative liquidation of banks authorized in Italy. For branches of EC banks in Italy which are members of an Italian guarantee scheme on a supplementary basis, payments shall be made where the guarantee scheme of the home member state has intervened. Guarantee schemes may provide for additional cases and forms of intervention.
2. Guarantee schemes shall protect depositors of EC branches of Italian banks; they may also provide protection for depositors of non-EC branches of Italian banks.
3. Claims relative to repayable funds acquired by banks in the form of deposits or other forms and to bankers' drafts or other similar credit instruments shall be eligible for payment.
4. The following shall be excluded from protection:
a) bearer deposits and other funds reimbursable to bearer;
b) bonds and claims arising from acceptances , promissory notes and securities transactions;
the banks share capital, reserves and other elements of capital; c- bis) the financial instruments regulated by the Civil code;
d) deposits arising from transactions for which there has been a conviction for crimes referred to in Articles 648 bis and 648 ter of the Penal Code;
e) deposits from central government departments, regions provinces and municipalities and other local authorities;
f) deposits made by banks in their own name and on their own behalf as well as banks claims;
g) deposits from: financial companies referred to in Article 59, paragraph 1 sub paragraph b) insurance companies; collective investment undertakings; other companies of the same banking group; electronic money institutions;
h) deposits, including those made by nominees, from owners of significant holdings for the purpose of Article 19;
i) deposits including those made by nominees, from members of the governing bodies and senior managers of the bank or of the banking groups parent undertaking;
j) deposits for which the depositor has, on an individual basis , obtained from the bank rates and conditions which helped to aggravate the banks financial situation on the basis of the findings of the liquidators.
5. The maximum payment for each depositor is equal to 100,000 euro. The Bank of Italy shall update this limit in line with the European Commission in line with inflation.
6. Claims, not excluded pursuant to paragraph 4, which are enforceable against the bank in compulsory administrative liquidation in accordance with the provisions of Section III of this Title shall be eligible for payment.
7. Payment shall be made within 20 working days from the date of liquidation according to Article 83, paragraph.1 . The time limit may be extended by the Bank of Italy in exceptional circumstances for a period of not more than 10 working days.
8. Guarantee schemes shall succeed to the rights of depositors in respect of the bank compulsory administrative liquidation within the limits of the payments made and, within such limits shall have priority in receiving allotments from the liquidation with respect to depositors who have received such payments.