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This might be a silly question, but as a customer of Deutsche Bank what would the likely outcome be to your money and account if the bank is allowed to fail? I

This might be a silly question, but as a customer of Deutsche Bank what would the likely outcome be to your money and account if the bank is allowed to fail? Is it just that another bank takes over the account?

JacobH 10y ago
You lose all of the money over the amount that isn't insured. If the bank even has insurance.
- gnud 10y ago
  All banks in EU are insured, but the max amount and percentage varies. The amount/percentage for Germany is 100% of up to EUR 100.000, according to Wikipedia.
- mrweasel 10y ago
  What I find interesting is that you lose all money over the insurance amount, but you're guaranteed that someone will buy up any debt you may have, regardless of the amount. While I understand why that is, it hardly seems fair that the customers can only lose money.
  - mathiasrw 10y ago
    Its working as designed. "Fair" was never part of the plan...
    - asciihacker 10y ago
      Yes, a bank is a business not a charity. Customer service is important but saving their own skin appears to matter more.
mtmail 10y ago
On default your savings are insured up to 100.000 Euro. https://en.wikipedia.org/wiki/Deposit_insurance#European_Union https://en.wikipedia.org/wiki/Deposit_insurance#European_Uni... The security measure only really works if one bank fails, not if suddenly many fail. You probably won't have access to your money for months.
lordnacho 10y ago
Move your money to another account. You don't want to get all sweaty when the news starts coming in about the final death throes. Even if there's a guarantee (and there are in many countries), I would imagine there would be a period of limbo where it's very hard to get a hold of people who can assure you. Meanwhile, there's plenty of other banks who seem a lot less likely to fail.
- TeMPOraL 10y ago
  If everyone would be to follow your advice, wouldn't that pretty much seal the fate of Deutschne Bank?
  - lordnacho 10y ago
    Yep. So if they do, you want to be early. If it's just cash, it's pretty damned easy to just go into your online banking and send it to another account.
  - CaptSpify 10y ago
    And that's how business works. Sucks for Deutschne, but I wouldn't want to have my money reliant on a system that needs a bailout. If they can't do business right, they need to fail.
    - TeMPOraL 10y ago
      Sure, but isn't that also the mechanism that can lead to the next bank collapsing, and then the next... Like with bubbles, individually beneficial action will result in doom if done by everyone at the same time.
pmorici 10y ago
If you have an account with a US branch and the amounts are under the FDIC insurance limit the process of transitioning people's accounts from the failing bank to a new bank is usually pretty efficient. It seems to happen overnight in most cases. Failed banks are much more common than people realize but they are usually smaller and don't have national or international presence so you don't hear about them as much. https://www.fdic.gov/bank/individual/failed/banklist.html https://www.fdic.gov/bank/individual/failed/banklist.html
- tcoppi 10y ago
  Historically in the 20th century, it is not that common for a bank to fail. Since 2008 bank failures have accelerated greatly. I also could tell a story about people losing access to their money for weeks, waiting on the FDIC, when IndyMac failed at the start of the recession. But it is not my story to tell as it did not affect me, and it was also one of the largest bank failures in US history, at a time when the FDIC was already undergoing stress, so I doubt it was malice. I just wouldn't count on FDIC insurance to save you in the short-term if shit starts to hit the fan. Have a cash reserve. Edit: Here's an interesting graph to ponder https://fred.stlouisfed.org/series/BKFTTLA641N https://fred.stlouisfed.org/series/BKFTTLA641N The first major cluster of failures actually preceded a crisis(the S&L crisis) and fell off rapidly after, whereas in 2008 the cluster was timed with the recession and had a longer tail of failures afterwards that continues to this day.
  - infinite8s 10y ago
    Where would you keep that short term reserve? Cash under your mattress?
    - tcoppi 10y ago
      Wherever you want. I'd recommend a firesafe bolted to your foundation slab, but that's just me. I'm not saying to keep a lot your short-term reserves in cash, or even necessarily more than just enough to buy yourself food for a day or two, but you also shouldn't rely on always being able to get money out of an ATM or that the global payment remittance systems will work in a true emergency, either.
andylynchnz 10y ago
If you're in the EU, your deposit is insured up to 100,000 EUR, and you must be paid out within 20 days under EU Law (Seven in Germany). http://www.consilium.europa.eu/en/policies/banking-union/single-rulebook/deposit-guarantee-schemes/ http://www.consilium.europa.eu/en/policies/banking-union/sin... Specific info for Deutsche Bank customers in Germany is available at http://www.edb-banken.de/en/banks/abfrage-deutsche-bank-ag/ http://www.edb-banken.de/en/banks/abfrage-deutsche-bank-ag/

JacobH 10y ago

You lose all of the money over the amount that isn't insured. If the bank even has insurance.

gnud 10y ago
All banks in EU are insured, but the max amount and percentage varies. The amount/percentage for Germany is 100% of up to EUR 100.000, according to Wikipedia.
mrweasel 10y ago
What I find interesting is that you lose all money over the insurance amount, but you're guaranteed that someone will buy up any debt you may have, regardless of the amount. While I understand why that is, it hardly seems fair that the customers can only lose money.
- mathiasrw 10y ago
  Its working as designed. "Fair" was never part of the plan...
  - asciihacker 10y ago
    Yes, a bank is a business not a charity. Customer service is important but saving their own skin appears to matter more.

mtmail 10y ago

On default your savings are insured up to 100.000 Euro. https://en.wikipedia.org/wiki/Deposit_insurance#European_Union https://en.wikipedia.org/wiki/Deposit_insurance#European_Uni... The security measure only really works if one bank fails, not if suddenly many fail. You probably won't have access to your money for months.

lordnacho 10y ago

Move your money to another account. You don't want to get all sweaty when the news starts coming in about the final death throes. Even if there's a guarantee (and there are in many countries), I would imagine there would be a period of limbo where it's very hard to get a hold of people who can assure you. Meanwhile, there's plenty of other banks who seem a lot less likely to fail.

TeMPOraL 10y ago
If everyone would be to follow your advice, wouldn't that pretty much seal the fate of Deutschne Bank?
- lordnacho 10y ago
  Yep. So if they do, you want to be early. If it's just cash, it's pretty damned easy to just go into your online banking and send it to another account.
- CaptSpify 10y ago
  And that's how business works. Sucks for Deutschne, but I wouldn't want to have my money reliant on a system that needs a bailout. If they can't do business right, they need to fail.
  - TeMPOraL 10y ago
    Sure, but isn't that also the mechanism that can lead to the next bank collapsing, and then the next... Like with bubbles, individually beneficial action will result in doom if done by everyone at the same time.

pmorici 10y ago

If you have an account with a US branch and the amounts are under the FDIC insurance limit the process of transitioning people's accounts from the failing bank to a new bank is usually pretty efficient. It seems to happen overnight in most cases. Failed banks are much more common than people realize but they are usually smaller and don't have national or international presence so you don't hear about them as much. https://www.fdic.gov/bank/individual/failed/banklist.html https://www.fdic.gov/bank/individual/failed/banklist.html

tcoppi 10y ago
Historically in the 20th century, it is not that common for a bank to fail. Since 2008 bank failures have accelerated greatly. I also could tell a story about people losing access to their money for weeks, waiting on the FDIC, when IndyMac failed at the start of the recession. But it is not my story to tell as it did not affect me, and it was also one of the largest bank failures in US history, at a time when the FDIC was already undergoing stress, so I doubt it was malice. I just wouldn't count on FDIC insurance to save you in the short-term if shit starts to hit the fan. Have a cash reserve. Edit: Here's an interesting graph to ponder https://fred.stlouisfed.org/series/BKFTTLA641N https://fred.stlouisfed.org/series/BKFTTLA641N The first major cluster of failures actually preceded a crisis(the S&L crisis) and fell off rapidly after, whereas in 2008 the cluster was timed with the recession and had a longer tail of failures afterwards that continues to this day.
- infinite8s 10y ago
  Where would you keep that short term reserve? Cash under your mattress?
  - tcoppi 10y ago
    Wherever you want. I'd recommend a firesafe bolted to your foundation slab, but that's just me. I'm not saying to keep a lot your short-term reserves in cash, or even necessarily more than just enough to buy yourself food for a day or two, but you also shouldn't rely on always being able to get money out of an ATM or that the global payment remittance systems will work in a true emergency, either.

andylynchnz 10y ago

If you're in the EU, your deposit is insured up to 100,000 EUR, and you must be paid out within 20 days under EU Law (Seven in Germany). http://www.consilium.europa.eu/en/policies/banking-union/single-rulebook/deposit-guarantee-schemes/ http://www.consilium.europa.eu/en/policies/banking-union/sin... Specific info for Deutsche Bank customers in Germany is available at http://www.edb-banken.de/en/banks/abfrage-deutsche-bank-ag/ http://www.edb-banken.de/en/banks/abfrage-deutsche-bank-ag/