An institutional protection scheme (IPS) is an arrangement defined under European Union law since 2013 by the Capital Requirements Regulation, involving a form of mutual liability among several banks and financial institutions, under which each participating entity is protected from insolvency by the financial resources of the other participants.
[3]: 14 That text stipulates in particular that an IPS is a "contractual or statutory liability arrangement which protects those institutions [which form it] and in particular ensures their liquidity and solvency to avoid bankruptcy where necessary".
Article 4(2) of the Deposit Guarantee Directive 2014 states: "An IPS may be officially recognised as a DGS".
[2]: 18 The main European IPSs are those of: The German Cooperative Financial Group refers to 1934 as the starting point of its mutual support arrangements that were later formally recognized as IPS.
[3]: 29 The Sparkassen-Finanzgruppe organized its mutual support arrangements in 1975, in response to the Bundesverband deutscher Banken's establishment of its deposit insurance scheme, the Einlagensicherungsfonds.