The Entschädigungseinrichtung deutscher Banken GmbH (EdB) (Compensation Scheme of German Private Banks) has been in place since 1998 as the statutory deposit guarantee scheme for the CRR credit institutions and building and loan associations (Bausparkassen) with a private legal structure (the private banks, for short).
The EdB’s job is to compensate the creditors of a bank assigned to it when a payout event occurs. The protected creditors comprise all private individuals, as well as partnerships and corporations.
In accordance with Section 6 of the German Deposit Guarantee Act (EinSiG), the EdB does not, however, protect deposits by banks, institutional investors such as financial service providers and insurance firms, or deposits by public authorities.
It should also be noted that repayment of liabilities resulting from securities transactions is ruled out if the depositor is a medium-sized or large company.
For depositors, a distinction must be made between repayment of deposits and repayment of liabilities resulting from securities transactions.