The Spanish Deposit Guarantee Fund of Credit Institutions (“FGD”) was created by 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 is based in Madrid.
The FGD has the dual objective or function of guaranteeing deposits held at credit institutions, whether in cash (current accounts, fixed-term deposits, savings deposits, etc.) or securities or other financial instruments (non-return of shares, units in investment funds, other securities held on deposit, etc.), and of ensuring the stability of the financial system by offering depositors security and peace of mind.
In order to fulfil its role of guaranteeing deposits and defending the interests of depositors —whose funds are protected— and of the FGD itself, the Fund may also step in to support the resolution of a credit institution by making funds available from the deposit guarantee compartment. In certain exceptional cases provided for at law, the FGD may use its funds to prevent the winding up of a credit institution, although this will not happen where a resolution process is already under way.