Depositor protection

Depositor protection reduces the risk that clients lose ordinary bank deposits when a bank becomes insolvent. In Switzerland it combines preferential treatment of certain deposits in insolvency with a deposit insurance system funded by participating institutions, subject to statutory limits and conditions. The protection mainly benefits cash deposits, not securities held in custody, which are generally segregated from the bank’s assets. Its purposes are consumer protection and confidence in the banking system, while not eliminating all counterparty or foreign-branch risks.