The German Deposit Guarantee Scheme (DGS) Administration, also known as the Depositor Compensation Scheme of the Association of German Banks (Entschädigungseinrichtung deutscher Banken GmbH, or EdB), is the legal authority responsible for protecting account holders in case of a bank’s failure. The scheme aims to maintain public confidence in the banking system, ensuring the stability of Germany’s financial market. By offering deposit insurance, the DGS Administration safeguards depositors against potential losses, mitigating the risks associated with bank failures and preventing a panic-induced run on banks.
Deposit insurance is essential for preserving financial stability and ensuring consumer protection. In Germany, the deposit guarantee scheme covers up to €100,000 per depositor per bank, offering a safety net for account holders in case their bank experiences financial difficulties or becomes insolvent. The scheme operates on a paybox principle, where the EdB collects contributions from participating banks and uses these funds to compensate depositors when needed. By doing so, the DGS Administration helps maintain trust in the banking system and prevents the domino effect of bank failures, ultimately contributing to the overall stability of the economy.
The organisational structure of the DGS Administration in Germany is based on the EdB, which is a separate legal entity under private law. It is a subsidiary of the Association of German Banks (Bundesverband deutscher Banken, or BdB), which represents the interests of private banks in Germany. The EdB is overseen by a managing director and a supervisory board, composed of representatives from participating banks.
Entschädigungseinrichtung deutscher Banken GmbH (EdB)
Burgstraße 28,
10178 Berlin, Germany
Telephone: +49 30 5900 1111
E-Mail: [email protected]