In Italy there is a cooperative that guarantees the protection of bank deposits, and it is the Fondo Interbancario di Tutela dei Depositi (FITD).
Fondo Interbancario di Tutela dei Depositi (FITD) is an Italian deposit guarantee fund found 1987, that guarantees the depositors of Italian banks, ensuring the same for the sum of 100,000 euros for each current account, in the event of default (bankruptcy) of the bank.
Is this true?
The FITD is not really a fund, but it is a simple agreement between the banks to intervene in case of bankruptcy of any Italian bank.
Unlike some European banking funds that oblige banks to pay money in the guaranteed fund, in Italy the FIDT has empty coffers. These funds were created to intervene in the event of bankruptcy of a few banking institutions, so in the event of a serious crisis, they will not be able to intervene in it. In fact, the sums available of the FIDT to be used to deal with any bank disruption and aimed at repaying depositors, are only a few billion euros, so only 0.4 – 0.8% of total eligible funds. From this, we can understand that the sums available in the event of financial failure would not even be sufficient to cover the repayments of a small bank. This “guarantee” of FIDT can work only with smaller banks or in the presence of a strong lack of liquidity. The statistics say that a solid bank should have the Core Tier (a fiscal indicator that measures the strength of a bank) above 6%, but above all a solvency ratio above 8%. Several Italian banks have these parameters lower than the minimum security value and are further under capitalized. It is therefore easily understandable that are not true the positive information from the mass media about the soundness of the Italian banking system, because it is in fragile and it is likely to get worse.
This situation generates suffering even to apparently more big banks; therefore it makes no sense to talk about the existence of a guarantee on deposits, less than 100,000 euros.