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FFSA's ability to pay out deposit guarantee compensations demonstrated in extensive exercises

Publication date 10.6.2024 11.09 | Published in English on 10.6.2024 at 11.30
Press release

The Financial Stability Authority (FFSA) has practised the payment of deposit guarantee compensations by extensive simulation exercises during the spring. The exercise programme proved the FFSA’s capability to pay out deposit guarantee compensations within seven working days, as required by law. The rapid seven working day compensation obligation has been in force in Finland since 1 January 2020. After the transitional period lapsed on 1 January 2024, the rapid compensation schedule is now in force across all EU member states.

According to law, the FFSA must test, on a regular basis, its capability to meet its statutory deposit guarantee duties, such as the payment of deposit guarantee compensations to the customers of an insolvent bank rapidly within seven working days. Since crisis situations are rare in Finland, authorities must maintain and develop their preparedness through various dry-run exercises. Exercises concerning deposit guarantee duties must be conducted in all EU/EEA member states in accordance with the guidelines of the European Banking Authority (EBA). In spring 2024, the FFSA tested its capability to pay out deposit guarantee compensations to depositors both domestically and in international cooperation.

EBA takes Finland's test observations into account in its further development work

The theme of the first exercise in spring 2024 was the payment of deposit guarantee compensations to depositors in branch countries in the event of a bank’s bankruptcy. The exercise was conducted over two weeks in April, in cooperation with the Swedish and Norwegian deposit guarantee authorities. The dry-run of the first week concerned cooperation between deposit guarantee authorities, depositor communications and the payment of compensations in the event of bankruptcy of a fictitious Swedish bank operating in Finland and Norway. In turn, the second week focused on corresponding measures in the event of bankruptcy of a fictitious Finnish bank operating in Sweden and Norway.

The second exercise of spring 2024, concerning the payment of deposit guarantee compensations domestically, was carried out on a comprehensive basis in May. The exercise took two weeks and involved, in addition to the FFSA, experts from the Financial Supervisory Authority, the Bank of Finland, the Digital and Population Data Services Agency, Palkeet (the Finnish Government Shared Services Centre for Finance and HR) as well as the Ministry of Finance and the Ministry of Social Affairs and Health. In the FFSA’s simulation exercise, the authorities served in different roles, such as observers of the planning of the simulation and performers of various functions. Some of the experts participated in the simulation exercise in the role of a test depositor. Their task was, among other things, to test and review the communications material produced by the FFSA for depositors, including the adequacy and clarity of instructions on what to do in a compensation payout situation.

With the spring 2024 tests, the FFSA has completed the simulation exercise programme for deposit guarantee in 2021–2024. The FFSA will report the results of the exercises and related development needs to the EBA in June. Based on reports submitted by different countries, the EBA will prepare a peer review of the capability of European deposit guarantee schemes to perform statutory deposit guarantee duties. The EBA has selected Finland as one of the seven deposit guarantee schemes whose exercise results from 2021–2024 will be used as the basis for the peer review by the EBA. The EBA peer review will be published within one year. Thereafter, the EBA will provide updated guidelines for deposit guarantee schemes operating in EU/EEA member states for simulation exercises in the upcoming years.

Further information: Deposit Guarantee Expert Anna Kanninen (anna.kanninen(at)

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