The Deposit Guarantee Fund for Credit Institutions was established by virtue of Royal Decree-Law 16/2011 of 14 October. It has own legal personality and full capacity to fulfil its functions. It operates under private law and its headquarters are in Madrid.
The Fund's purpose is to guarantee deposits in cash and securities or other financial instruments held by credit institutions, up to the limit of EUR 100,000 for cash deposits or, in the case of deposits in other currencies, the equivalent sum at the applicable exchange rates. The Fund also guarantees the following deposits, irrespective of their amount, for three months from the moment the funds have been credited or these deposits have become legally transferable: a) deposits from real estate transactions involving private residential properties; b) deposits deriving from payments received by the depositor on a one-off basis in connection with marriage, divorce, retirement, dismissal, disability or death; and c) deposits concerning insurance payments or indemnity payments for damages as a result of a criminal act or judicial error. It also provides a guarantee of up to EUR 100,000 to investors who have deposited securities or other financial instruments with a credit institution. These two guarantees offered by the Fund are separate and compatible with each other.
In order to perform its role guaranteeing deposits and defending the interests of depositors with secured funds and the Deposit Guarantee Fund for Credit Institutions itself, the Fund may take the necessary steps to support the resolution of a credit institution drawing on the funds in the deposit guarantee compartment. Exceptionally and provided that no resolution process has commenced, the Fund may use its funds to halt the winding-up of a credit institution in the circumstances stipulated in law.