Accounts Abroad – When saving is dangerous

Accounts Abroad When saving is dangerous

Image result for bankBorn in Dingolfing in 1962, studied journalism in Munich. 13 years at the Abendzeitung in Munich, most recently as head of the department of economics. Since 2008 at the SZ , initially as a sheet-maker for money, from 2009 to 2015 as a correspondent for banks in Frankfurt. Since then back in Munich. Writes mainly about financial topics.

Imagine investing money in a bank and then closing it from day to day. Exactly 1146 savers from Germany have experienced this nightmare in the past few days and should therefore have spent a restless Easter. On March 26, financial supervision in Estonia deprived Versobank of its license; she is suspected of having favored international money laundering and the financing of terrorism.

The German savers came over the Zinsportal Savedo to the Versobank. It collected money from 25,000 German citizens in a few years and transferred it to European banks, which pay a little more interest than those 0.0 to 0.05 percent, which is often only available at German institutes. These banks are located in Romania, Croatia or Estonia. For example, the Versobank paid 1.6% interest a year on fixed-term deposits with a maturity of three years.

Savedo and similar portals are very popular with the Germans, also because they are supposed to score with certainty. They advertise with European deposit insurance, which applies to all EU countries and stipulates that for each saver up to 100 000 euros are hedged, a bank should go bankrupt or close for other reasons. But what if it really comes to that? What is happening with Versobank in Estonia is therefore a test of the European banking system: what about the promise of deposit insurance?

In general, it looks good ten days after the bank closed: Estonia’s financial regulator assured that all savers get back their money including accrued interest. She presented a document with questions and answers online (, appointed as liquidator the Estonian subsidiary of the German auditing firm KPMG, two Swedish banks to settle the payout. On this Thursday, the first savers get their money back, until April 20 should all be compensated. According to KPMG, German savers account for 52 million euros, a quarter of the bank’s total deposits. Everything seems to go according to plan. “In the current case, we see that the processes intended for emergencies are effective,” says Christian Tiessen, Savedo’s CEO.

So good, no cause for excitement for the German interest rate hunters? Niels Nauhauser, bank expert of the consumer center Baden-Wuerttemberg, does not see the matter quite so calmly. “We have always warned against blind trust in the European Deposit Guarantee Scheme,” he says. In fact, there is no single system, there is no European pot in which the banks of all EU countries deposit. There are only a few individual pots: every EU country is required to guarantee up to € 100,000 per saver with its national deposit guarantee system.

There is no single European deposit protection

Big opponents of a common pot are, for example, the German savings banks and cooperative banks. They argue that then German savers would have to stick with their deposits in the bankruptcy of a Spanish bank – which is not true: The money would not come directly from the deposits, but it would come from the pot in which all the banks have previously deposited.

In the case of the Estonian Versobank, therefore, the Estonian financial supervision is now responsible for organizing the compensation of savers. Theoretically, it would have to do this from the pot of Estonian deposit insurance. In practice, however, this is apparently not necessary, because there are reportedly enough funds at Versobank; It was not closed because of capital problems, but because of the allegation of money laundering.

For consumer advocate Nauhauser, the precedent of Versobank is nevertheless not apt to reassure savers. “That it works well this time does not mean that even in future savers can always be fully compensated,” he says. In the end, the reliability of deposit insurance depends on the political will of a country. He can imagine some scenarios in which this reliability no longer exists. “The Versobank is relatively small, but what if a large bank goes bankrupt in a small country?” Asks the consumer advocate. Then the question arises as to whether the taxpayers of the country are guaranteeing the savings of foreign investors on a large scale. The government is coming under public pressure and may decide in favor of its own taxpayer.

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