Public awareness as the foundation for an effective DGS
The Dutch Deposit Guarantee Scheme (DGS), which is operated by DNB, guarantees depositors’ savings up to EUR 100.000 per account holder per bank. This guarantee helps to prevent bankruns when a bank fails, or if depositors expect a bank to fail, and the DGS thus contributes to financial stability.
To further strengthen confidence in the deposit guarantee, the DGS has been improved in several respects over the past few years. For example, the guaranteed amount was raised to EUR 100,000 in 2008 and the coverage was extended to temporarily high balances that relate to the purchase or sale of a residential property in 2015. The payout deadline has been reduced and a Deposit Guarantee Fund financed by the banks is being set up.
To ensure the DGS can indeed effectively prevent bank runs, it is important that the Dutch public are well aware of the key features of the DGS. That is why DNB investigated the extent of the Dutch public's knowledge of the DGS, and the effects of this knowledge on their confidence in the system.