A panic of the type that hasn't been seen in the financial sector since the 2008-2009 financial crisis, was recently sparked when three US banks – in particular Silicon Valley Bank – and one European one (Credit Suisse) were plunged into chaos. Customers were seen queuing outside their branches in a bid to rescue their savings before the money evaporated as the banks crashed.
Thankfully for savers in Belgium, no Belgian banks have been affected but the ease and speed of the most recent crash raised questions here about how safe their money is. The European Central Bank moved quickly to allay any fears of contagion.
"The euro area banking sector is resilient and has strong capital and liquidity positions,” a statement from the ECB read. “In any event, the ECB has a full range of monetary policy instruments to support, where appropriate, the liquidity of the euro area financial system and to preserve the smooth transmission of monetary policy."
However, the 2008-2009 financial crisis is still fresh in many minds in the sector and as such, the ECB has still decided to convene its supervisory body of banks in the eurozone for an "exchange of views" on the banking sector after the turbulence of recent days. What might cause some concern is that it already held such a meeting a few days before the latest announcement.
Still, if a bank were to fail in Belgium (or in Europe) despite all the precautions taken by the supervisory authorities, there is a state-guaranteed deposit protection system.
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"Any deposit held with a credit institution in a Member State of the European Economic Area is protected up to an amount of €100,000 per person and per institution," information on the website of the Guarantee Fund of the FPS Finance explains.
As all Belgian banks are compulsorily affiliated with the Guarantee Fund, their customers' deposits are, in fact, protected in the event of a bank's failure.
It is important to note that the guarantee is limited to "€100,000 per person and per establishment." Belgians who have – for example – €200,000 in different accounts (current account, savings account, term deposit account but also nominative or dematerialised cash vouchers registered in registered accounts) in a single institution are therefore not fully protected by the deposit guarantee system.
Many therefore choose to spread their money among several different financial institutions.
