Information note on the consequences of certain bank failures

March 20, 2023 | News, Press Releases, Sector views

Following the recent bankruptcy of certain banking players, we wish to reassure the general public about the solidity of French payment institutions and their ability to protect their customers' funds.

The protection mechanisms are precise and effective, in accordance with extremely strict regulations and prudential requirements. In the event of default by an institution, customer funds are returned in full under the supervision of the ACPR.

In this regard, the following points should be remembered:

1. Payment institutions are subject to strict regulation of the ACPR, which is attached to the Banque de France.

2. Customer funds included in the payment circuit are fully protected.

Payment institutions are required to comply with strict regulations and prudential requirements in terms of protecting customer deposits. These must be invested in low-risk, liquid and safe assets. In France, these are mainly sight deposits confined in the books of partner banks and, to a lesser extent, investments in units of qualified money market funds or guarantees issued by banks or investment companies. partner insurance. As such, each of the mechanisms used by payment institutions is subject to prior and specific agreement from the ACPR.

3. Strong safety in case of failure.

Clients' funds are protected against recourse by other creditors of the establishment. Banks or insurance companies that are partners of the payment institution then fully return the customer funds under the supervision of the ACPR. In addition, customer funds deposited in segregated accounts in the books of partner banks also benefit from the protection of the deposit guarantee fund (up to 100k euros per customer and per bank), thus offering protection equivalent to that of an account in each of these banks. This provision complements the protection offered by payment institutions. By diversifying their banking and insurance partners, payment institutions are also strengthening the effectiveness of their system for protecting their customers' funds.

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