Banking: Deposit Insurance and Assets Under Management

Deposit Insurance Overview

Deposit insurance is a widely recognized concept, with insured amounts varying by jurisdiction. In the EU, coverage reaches EUR 100,000 or the equivalent in other currencies,while in the U.S., it is $250,000 or the equivalent in other currencies.

Signs of Potential Issues

Indicators of bank instability may include the loss of correspondent banking facilities, restricting transactions in major currencies like USD or EUR—unless the bank itself chooses not to engage in those currencies.

Understanding Assets Under Management

The treatment of Assets Under Management (AuM) is more complex. In some jurisdictions, banks must segregate client assets (AuM) from their deposits and other funds. This separation enhances protection for clients in the event of bank resolution, administration, or liquidation.

Jurisdictions with Asset Protection

Typically, jurisdictions like Austria, Liechtenstein, and Switzerland require the segregation of AuM, making them popular private banking destinations for HNWIs and Ultra High Net Worth Individuals (UHNWI).

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