Published: 02.10.2023

1 October 2023 marks 25 years since the establishment of an important stronghold of financial stability – the Deposit Guarantee Fund (DGF) – in Latvia. Since that time, it has seen significant development and has meticulously fulfilled its task – to manage the contributions made by the members of the DGF and to ensure the disbursement of compensation to depositors for deposits in case of unavailability of deposits.

During the existence of the DGF, a reliable, efficient and secure component for the financial protection system has been created. To ensure the disbursement of the guaranteed compensation, an efficient disbursement scheme has been established and it has been functional for several years.

In 2022, the DGF developed a new scheme for the disbursement of the guaranteed compensation enabling remote disbursement and receipt of the guaranteed compensation, thus easing the receipt of the guaranteed compensation for depositors. This was made possible due to the merger of Latvijas Banka and the Financial and Capital Market Commission, i.e. by taking advantage of the possibilities offered by Latvijas Banka's payment system and by using the mechanism for the receipt and processing of applications for the guaranteed compensation created in cooperation with credit institutions.

The DGF is constantly developing and improving, and is closely and broadly cooperating with other deposit guarantee funds of the European Union and international financial institutions. A transparent and competitive financial protection system has been enabled by providing the same level of protection coverage across the European Union.

The accumulation and management of the DGF funds and the disbursement of the guaranteed compensation of the DGF is performed by Latvijas Banka. Our future priorities: to continue to strengthen the protection of depositors, to ensure the trust of depositors and to provide equal protection coverage across the euro area.

Briefly on the DGF

  • The DGF was established on 1 October 1998. The members of the DGF started making contributions from 1 January 1999.
  • Since the establishment of the DGF in 1998, the amount of the guaranteed compensation has risen more than 140 times – from the initial 500 lats (around 711 euro) to the current 100 000 euro.
  • So far, during the operation of the DGF, compensation has been disbursed to the depositors of seven banks and six credit unions that have ceased their operation. The guaranteed compensation worth more than 1.3 billion euro has been disbursed to approximately 290 000 depositors of the liquidated banks and credit unions.

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