If a bank or securities firm is declared bankrupt or a protective measure is imposed under Article 26 para. 1 lets. e-h of the Banking Act, depositors lose access to the money they have deposited. The deposits fall into the bankruptcy assets and without the deposit protection scheme would at best be repaid only partially when the proceeds of the bankruptcy are distributed. The deposit protection scheme, however, is designed to ensure that deposits are paid out quickly up to the maximum amount of CHF 100,000 per depositor. The aim is to prevent depositors from withdrawing funds from their bank because they fear for its safety, thus triggering a bank run.
The Swiss depositor protection scheme is based on a three-tier system.
The esisuisse FAQs provide further useful information on depositor protection.
“esisuisse”, which is organised as a private association, is the agency of the deposit protection scheme. “esisuisse” is the self-regulatory organisation of the banks and securities firms and is tasked with deposit protection. It has existed since 2005 (named “Swiss Banks’ and Securities Dealers’ Depositor Protection Association (ESI)” until 2014). All authorised financial institutions with protected deposits are obliged to join this self-regulatory organisation.