- The cooperative banks attending the general meeting of members of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) [National Association of German Cooperative Banks] in Berlin on May 6, 2015 voted unanimously to amend the BVR protection scheme in line with the new EU requirements for deposit protection. "This decisive vote by our member banks underlines the Cooperative Financial Network's unconditional commitment to continue – even under the new European requirements – the bank protection that it has collectively provided for more than 80 years. This protection remains a fundamental part of the cooperative business model. Our customers can continue to place their trust in our solid deposit guarantee scheme," assured BVR president Uwe Fröhlich. Customer deposits held with cooperative banks – such as local cooperative banks, Sparda banks, PSD banks, and church banks – will continue to be fully protected in the future owing to the bank protection provided by the BVR.
The background to the necessary amendments to the BVR protection scheme is the new EU directive on the harmonization of deposit guarantee schemes, which applies to all banks in Europe and is to be transposed into national law by July 3, 2015. In order to comply with the EU directive, a separate company in the form of a wholly owned BVR subsidiary under the name of BVR-Institutssicherung GmbH will be set up – in addition to the existing (voluntary) BVR protection scheme and the bank protection that it provides – and will ensure statutory deposit protection of up to €100,000, while at the same time protecting the banks in the Cooperative Financial Network.
The BVR protection scheme amendments approved as a result of these new legal requirements have primarily become necessary because the EU directive emphasizes the aspect of depositor compensation. This situation never arises in practice owing to the protection provided for cooperative banks (including their central institutions DZ BANK and WGZ BANK), which in turn protects depositors. No affiliated bank has ever become insolvent since the BVR protection scheme was set up; consequently, no compensation has ever had to be paid to depositors. The BVR protection scheme provides full cover for savings deposits, savings accounts, savings certificates, time deposits, fixed-term deposits and instant-access deposits in current accounts held by individuals or companies. The BVR protection scheme also covers bearer bonds issued by cooperative banks.
The BVR protection scheme in its expanded form will also comply with the EU directive's new requirement which stipulates that, by July 3, July 2024, all deposit guarantee schemes in Europe must be funded in such a way that their available financial resources equal at least 0.8 percent of the total amount of all affiliated institutions' covered deposits.