Document Type

Case Study

Case Series

Account Guarantee Programs

JEL Codes

G01, G28


Following international calls to strengthen deposit-insurance systems during the Global Financial Crisis (GFC), Romanian authorities increased their deposit-insurance coverage from EUR 20,000 to EUR 50,000 (USD 26,800 to USD 67,000) on October 14, 2008, with the change coming into effect the next day. The Fondul de Garantare a Depozitelor Bancare (FGDB), Romania’s existing deposit insurer, implemented it. Membership was mandatory for all banks registered with the National Bank of Romania (NBR), and local branches of foreign banks could apply for supplementary coverage if their home coverage was below EUR 50,000. The FGDB covered most deposit accounts and charged participating institutions fees. FGDB-insured institutions were also required to extend the FGDB standby credit lines. In March 2009, the EU adopted a directive requiring all member states to increase their deposit-insurance coverage to EUR 100,000 by December 31, 2010. Economic conditions in Romania continued to worsen, and Romanian authorities signed a Stand-By Agreement (SBA) with the International Monetary Fund (IMF) in April 2009. The SBA required Romania to alter the FGDB’s funding and governance structure, eliminating standby credit lines and removing private officials from its governance structure. Romanian officials complied with the EU’s directive and the IMF’s terms in 2010. Ultimately, no institutions failed between 2008 and 2010.

Date Revised