The Norwegian Banks' Guarantee Fund was established under a legislative amendment on 25 June 2004. The Act came into force on 1 July 2004 with the amalgamation of the Commercial Banks' Guarantee Fund and the Savings Banks' Guarantee Fund. The operations of the Norwegian Banks' Guarantee Fund are regulated in the Guarantee Schemes Act of 6 December 1996 No. 75.
Membership of the Norwegian Banks' Guarantee Fund is mandatory for all savings banks and commercial banks with headquarters in Norway. The King may also decree that in addition to banks, other credit institutions are required to be members of the Guarantee Fund.
Credit institutions headquartered in other EEA states but receiving deposits from the general public through branches in Norway may become members of the deposit guarantee scheme if the deposit guarantee scheme in the branch's home country is not considered to provide the branch’s depositors with protection equal to that afforded under the Act. Membership requires the approval of Finanstilsynet (The Financial Supervisory Authority of Norway).
The purpose of the Guarantee Fund is to secure the deposit liabilities of its members in such a way that deposits of up to NOK 2 million per depositor per bank are guaranteed, should a member be unable to meet its commitments.
The Guarantee Fund's most important function is to manage situations in which one or more banks encounter difficulties in meeting their commitments. By way of preparation for such a situation, contingency plans are drawn up and maintained and exercises are conducted.
The Norwegian Banks' Guarantee Fund does not have sufficient personnel resources to handle crisis situations unaided. Accordingly, binding agreements have been concluded with Finance Norway, under which access to additional resources can be provided should a crisis arise.
The bodies responsible for the day-to-day operations of the Guarantee Fund include a department responsible for, amongst other areas, preventative work in the form of analyses of member institutions using various standard and key figures, providing advisory services to smaller banks, organising courses, calculating and collecting the levy and guarantees and reporting on the cover provided under the deposit guarantee scheme.
The development of a guarantee fund institution has been necessary in order to put in place satisfactory safeguards for customers, banks and Society. The development process involves work on framework conditions and statutes etc. Establishing channels of cooperation with guarantee funds in other countries forms part of this work.