Bern, Switzerland (GenevaLunch) – Bank deposits in Switzerland up to CHF100,000 will be covered in case the bank gets into trouble, and depositors should be paid within 20 days. The Swiss government proposal foresees a two-tier system: a public guarantee fund with CHF9.75 billion to be funded by the banks in the first tier. Then, should the fund be exhausted, the Swiss government will either pay out the necessary funds or guarantee the difference. In either case, banks will pay a yearly premium towards the additional funding.
The funds could also be used under certain circumstances to ensure essential business continuity for a troubled bank, according to the Swiss Federal Department of Finance (FDF) 14 September.
The current law covering deposits expires in 2010. It was a stop-gap measure introduced in late 2008 because of the banking crisis. The government proposal would make the guarantee permanent. It now goes through the consultative process until 31 December 2009.