Document Type

Case Study

Case Series

Account Guarantee Programs

JEL Codes

G01, G28


At the height of the Global Financial Crisis (GFC), Hungary announced changes to its deposit-insurance system on October 8, 2008. The government said that it would increase the deposit-insurance cap from HUF 6 million to HUF 13 million (about USD 31,000 to about USD 68,000), the equivalent of roughly EUR 50,000 (about USD 68,000), in line with a European Union (EU) recommendation. Hungary’s finance minister also announced that the state would temporarily provide an unlimited deposit guarantee, following the actions of several European countries. The unlimited guarantee was political, meaning it was not implemented through official legislation. It was effective immediately, while the increased coverage came into effect on October 15, 2008. The National Deposit Insurance Fund (NDIF), Hungary’s deposit insurer, administered Hungary’s crisis-time deposit guarantee as an extension of its statutory authority; membership was compulsory for most deposit-taking institutions. The following year, in response to an EU directive, Hungary raised the deposit-insurance cap to the Hungarian forint (HUF) equivalent of EUR 100,000, among other measures. In February 2010, the NDIF and government made good on their respective guarantees when one institution failed. Another failure occurred in January 2011, for which each depositor received the HUF equivalent of EUR 100,000.

Date Revised