The Depositor Compensation Scheme of Spain, or “Fondo de Garantía de Depósitos” (FGD) in Spanish, is a financial institution that ensures the protection of depositors’ funds in the event of a bank failure. The deposit guarantee scheme (DGS) functions by providing deposit insurance up to a specific limit, which is currently set at €100,000 per depositor and per institution. This safety net is essential in maintaining trust and confidence in the Spanish banking system, as it ensures that individual savers do not lose their deposits if their bank becomes insolvent.
Deposit insurance is crucial for promoting financial stability and preventing bank runs, which can exacerbate economic crises. By guaranteeing a certain level of deposits, the DGS administration aims to minimize the risk of contagion and maintain public trust in the financial system. In the event of a bank failure, the Spanish DGS administration quickly compensates depositors up to the insured limit, reducing the likelihood of panic and widespread withdrawals from other banks.
The Spanish DGS administration is governed by a board of directors, which consists of representatives from the Bank of Spain, the Ministry of Economy, and various financial institutions. Its primary responsibility is to manage the FGD fund, which is financed by contributions from member banks. In case of a bank failure, the DGS administration works closely with the Bank of Spain and other regulatory authorities to ensure a smooth and efficient compensation process for affected depositors. To contact the DGS administration in Spain, you can visit their official website at https://www.fgd.es/ or call them at +34 91 360 46 00.