Deposit insurance and government guarantee
Are my deposits protected by the esisuisse deposit insurance? Yes, like every bank and investment firm in Switzerland, St.Galler Kantonalbank AG is obliged to sign the self-regulatory «Agreement between esisuisse and its members». This protects client deposits up to a maximum amount of CHF 100,000 per client. Medium-term notes that are deposited with the issuing bank in the name of the depositor are also deemed to be deposits. Deposit insurance in Switzerland is guaranteed by esisuisse. The deposit insurance scheme is explained in detail at www.esisuisse.ch/de.
Moreover, the Canton of St.Gallen is liable by law (Art 6. Cantonal Bank Act) for all liabilities of St.Galler Kantonalbank AG (parent company SGKB) should its own funds prove insufficient. The government guarantee does not relate to St.Galler Kantonalbank Deutschland AG.
Within the context of the government guarantee, the Canton of St.Gallen is, for instance, liable for deposits in personal and savings accounts at SGKB, as well as for SGKB liabilities arising from medium-term notes. The Canton of St.Gallen’s government guarantee thus goes beyond the deposit protection of a maximum of CHF 100,000 per client applying to all Swiss banks.
In particular, the government guarantee covers:
- Customer deposits
- SGKB bonds
- SGKB medium-term notes
- Vested benefits and pillar 3 savings accounts
The government guarantee does not cover:
- Share capital of SGKB
- Subordinated loans (these are loans that are subordinated to other debt capital in the event of the liquidation or insolvency of a company)
- Portfolio values of the client (bonds from third-party debtors, equities, investment funds, derivatives, structured products, but also BVG and pillar 3 savings fund units) would be separated out in the event of bankruptcy, as at other banks. This means that they do not form part of the bankrupt’s estate but remain the property of the client. No government guarantee exists with respect to the market development of such portfolio values, including the creditworthiness of third-party debtors.
- Business relationships with the subsidiary St.Galler Kantonalbank Deutschland AG: SGKB pays the Canton of St.Gallen annual compensation for the government guarantee (Art. 7 Cantonal Bank Act). This amounts to 0.3 to 0.8 percent of the bank’s legally required equity.
The government guarantee is the subject of repeated political discussions in the Canton of St.Gallen. However, any adjustment to the government guarantee (partial or full abolition) could only be brought about by means of a change to the Cantonal Bank Act. Such a change in law would be subject to a referendum in which voters would have the final say.