Protecting depositors in the event of a Credit Institution authorised by the Gibraltar Financial Services Commission being unable to repay deposits.
The Gibraltar Deposit Guarantee Scheme (“GDGS”) protects depositors and pays compensation in the event of a Credit Institution authorised by the Gibraltar Financial Services Commission (“GFSC”) being unable to repay deposits. The Scheme does not regulate these licensed Credit Institutions - this is carried out by the GFSC.
The original Directive on Deposit Guarantee Schemes (“DGS”) was established in 1994 and was transposed into local legislation via the Deposit Guarantee Scheme Act, 1997. Although the financial arena saw significant changes subsequent to this, there were minimal amendments to the Scheme. Therefore, in July 2010, the European Commission proposed a comprehensive review of the DGS Directive. The aim of this was to harmonise and simplify the Directive, as well as making some significant improvements. Gibraltar upheld its responsibilities and implemented the EU Directive on Deposit Guarantee Schemes in 2014, with the intention of improving the protection of deposits and therefore depositor confidence and financial stability. Requirements were therefore aligned to that of the EU. All banks throughout the EU now provide a uniform protection to depositors. The Scheme is financed by the licensed Credit Institutions and therefore the depositor does not need to contribute to the Scheme.
GFSC is the Competent Authority and has been appointed as the Resolution Authority. The Financial Services Resolution and Compensation Committee (“FSRCC”) is the designated authority, who administers the Scheme.
Only the GFSC, as the regulator, or the Courts can decide if a Credit Institution is unable to repay its deposits. The GDGS cannot make this decision.
The Financial Services Resolution and Compensation Committee is made up of the following members:
Albert Mena (Chair)
Michael Llamas QC
The Gibraltar Deposit Guarantee Scheme protects depositors in the event of Credit Institutions being unable to pay deposits