About the Guarantee System

The Financial Market Guarantee System (the "Guarantee System") is an institution established by law to ensure, administer and use financial resources for securing and preserving stability on the financial market in the Czech Republic. The Guarantee System cooperates primarily with the Czech National Bank, Ministry of Finance of the Czech Republic and, in the case of need, also with similar mechanisms in other European countries. The Guarantee System was established on 1st January 2016 on platform of the former Deposit Insurance Fund. Since this date the Deposit Insurance Fund has become an internal unit of the Guarantee System, similarly to the Crisis Resolution Fund as of the same date.

The first pillar of the Financial Market Guarantee System is the Deposit Insurance Fund. If the Czech National Bank makes an announcement on any financial institution included in the deposit insurance system being unable to meet its obligations to beneficiaries under statutory and contractual conditions, or if a court makes a decision on the bankruptcy of such institution, the Financial Market Guarantee System will commence disbursement of compensation for receivables from deposits to the clients of that financial institution from the resources collected in that fund . Banks, branches of banks from non-Member States, building savings banks and cooperative credit unions must make regular annual contributions to the Deposit Insurance Fund.

The second pillar of the Financial Market Guarantee System is the Crisis Resolution Fund. The resources collected in it may be used if there is a threat to the stability of any of the financial institutions which are systemically important/perform critical functions on the financial market. If the Czech National Bank concludes that their continuation is in public interest, it may decide to use one of the crisis resolution tools whose objective is to prevent situations that could otherwise result in the insolvency or bankruptcy of a financial institution and the subsequent payout of deposit compensation to its clients. The Czech National Bank can temporarily take control over the institution and can e.g. divide and sell the "healthy" part to a new owner. More information is available here. This fund thus does not serve for direct payout of compensation for deposits, but enables a solution in cases when the rescue of the financial institution is feasible, credible and in the public interest. Contributions to the Crisis Resolution Fund are made not only by institutions already participating in the deposit insurance system, but also by some investment firms, also on a regular annual basis.

As of 30 June 2023 the total volume of the financial reserves in the funds were:

- Deposit Insurance Fund: CZK 17,11 billion

- Crisis Resolution Fund: CZK 33,00 billion

Besides the financial reserves, the Guarantee System has several statutory options how to access additional resources so that all clients entitled to compensation obtained their money back. The Guarantee System can obtain additional resources by prescription of extraordinary contributions, loan on the financial market or a loan from other deposit insurer within EU, as a last option also from the state budget.


(April) The Deposit Insurance Fund office opens
The collapse of the first bank since the establishment of the Fund (Česká banka, a.s.)
Insurance coverage is extended to deposits held in foreign currencies and the minimum limit is increased from CZK 400,000 to EUR 25,000
The CNB declared Union banka insolvent, the Fund commences the largest compensation payout in its history when it comes to number of clients (CZK 12.5 billion, 130,000 clients)
Integration of cooperative credit unions into the deposit insurance system
The 10% co-insurance is abolished and the maximum limit increased from EUR 25,000 to EUR 50,000
Increase of the insurance limit to EUR 100,000; reduction in the deadline for payout commencement to 20 business days
Transformation of the Deposit Insurance Fund into the Financial Market Guarantee System
(June) Reduction of the deadline for payout commencement from 20 business days to 7 business days
Start of deposit compensation payout to clients of Sberbank CZ, a.s., the largest payout when it comes to amount of covered deposits