SAG

The SAG – Sanierungs- und Abwicklungsgesetz (Restructuring and Resolution Act) – (Source:)

is a German law for the restructuring and resolution of banks and financial institutions.
It was introduced in 2015 as part of the European Banking Union to ensure financial stability and, above all, to regulate one thing:

Who is liable if a bank gets into trouble?
And this has very concrete consequences – including for bank customers.

The SAG implements the EU Bank Recovery and Resolution Directive (BRRD) in Germany.
It provides the BaFin and the Federal Agency for Financial Market Stabilization (FMSA) with tools to restructure or orderly resolve failing banks without burdening taxpayers.

What happens to customers’ money in a banking crisis?

The SAG includes the principle of "Bail-in" – in contrast to the previously common "Bail-out" (state rescues bank).

"Bail-in" means: The bank’s creditors are liable – including customers!

The BaFin (or the resolution mechanism) can take measures in the following order:

Shareholders lose their invested capital.
Bondholders and holders of bank bonds are involved.
Large customers with deposits over €100,000 can be held liable. Small investors with deposits under €100,000 are legally protected (deposit insurance).

However, the deposit insurance of €100,000 only applies in the event of a BANK INSOLVENCY, not in a resolution under the SAG where the bank is not yet insolvent.

Under the SAG, there is no automatic payout of deposits under €100,000.

Example Scenarios (SAG in Practice):

A bank gets into trouble.
The BaFin determines that a resolution is in the public interest.

It may, for example, order:
Conversion of bank deposits into shares (Debt-Equity-Swap)
Reduction of deposits over €100,000
Moratorium: Temporary freeze on payouts
Goal: Restructuring the bank without state aid

We support you with various solution approaches.