EFDI publishes new paper on Temporary High Balance (THB) Payouts
The European Forum of Deposit Insurers – Association of European Deposit Guarantee Schemes and Investor Compensation Schemes European Forum of Deposit Insurers (EFDI) is pleased to announce the publication of its new paper examining the implementation, operational challenges, and real‑life functioning of Temporary High Balance (THB) payouts within the EU deposit guarantee framework.
THBs are a key element of depositor protection, offering additional, time‑limited coverage for depositors who experience exceptional life events that temporarily increase their bank balances—such as the sale of a primary residence, inheritance, or insurance compensation. The paper is based on a detailed EFDI survey conducted between March and October 2025, gathering insights from 27 Deposit Guarantee Schemes (DGSs) across Europe. It assesses:
- National legal frameworks
- Operational practices
- Real THB cases handled by DGSs
- DGS views on the European Commission’s CMDI legislative proposals
Main findings
Survey results show strong overall support for THBs as a fair and socially justified protection mechanism. However, the study highlights significant differences across jurisdictions:
- Coverage limits range from €30,000 to unlimited
- Protection periods vary from 3 to 12 months
- Only 11 of 27 DGSs have processed THB claims to date
While THB payouts remain relatively rare, they are often administratively complex, with high denial rates driven by unclear documentation and limited depositor understanding. Additional challenges include:
- Vague or incomplete national legislation
- Difficulties obtaining timely or complete data from failed banks
- Procedural delays
- Language and coordination challenges in cross‑border cases
Real‑life experience confirms that effective cross‑border THB payouts require clear, coordinated procedures between Home and Host DGSs covering communication, documentation, and legal interpretation.
Key suggestions for strengthening THB implementation
The paper offers practical guidance aimed at improving consistency, efficiency, and depositor awareness:
- Internal manuals: DGSs should develop detailed workflows for handling THB claims, including verification and documentation processes.
- Enhance public communication: Clear explanations of THB protection should be provided on DGS websites, depositor information sheets, and, where relevant, through targeted communication initiatives.
- Cross‑border protocols: Bilateral agreements should define information exchange, division of responsibilities, working languages, and recognition of documentation.
- Continuous monitoring: Ongoing data collection, experience sharing, and peer discussions are essential to ensure the THB framework remains coherent and effective under upcoming CMDI reforms.
EFDI’s new paper contributes to this objective by offering analytical insights, identifying practical challenges, and proposing concrete suggestions to support DGSs across Europe.
This paper was made possible thanks to the dedicated work of the EFDI D3I Working Group. EFDI extends its sincere appreciation to the group's leaders, Renata Kadlecova and Peter Nagy, for their commitment and guidance in leading this important Working Group, and to all Working Group members for their valuable contributions and, more in particular, to Vibeke Engelhardtsen, Isabelle Gil and Zuzana Sucha. Their expertise, detailed input, and continuous engagement were instrumental in preparing this paper.
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