Protecting your money: is your bank account secure?

When a bank will be in difficulty, it can take from the accounts of its customers.

But no one must think that DB is the only bank in trouble.

Make no mistake, DB is not the only big bank in trouble right now.

A bank in trouble could, for example, be taken over by another, stronger bank.

First of all, we were not looking for an established bank, we were looking for a bank under stress that we could turn around, restructure and recapitalise.

Guarantee funds can be drawn on if a bank goes bankrupt, but generally their provisions are insufficient to support a “big” bank in difficulty.

In a “normal” system the state takes control of a damaged bank until that bank can be rehabilitated, and then releases it back to the wild.

In the euro area, ELA loans are provided by the national central bank of the country in which the struggling bank is based.

In a “normal” system the state takes control of a damaged bank until that bank can be rehabilitated, and then releases it back to the wild.

The consultation paper sets out the terms and conditions under which certain liabilities of a failing or failed bank would be converted to create common equity to recapitalize the bank.

The Chancellor Alistair Darling announced in February that Northern Rock – the beleaguered bank – was to be temporarily nationalised.

State would inject billions of euros into struggling bank if capital-raising plan does not work, says finance ministry official

This is especially true for Citadele banka which currently is not rated, and has emerged from the bank in difficulty in the context of restructuring.

If customers of a problem bank withdraw their money en masse, this can cause panic among customers of healthy banks.