Press release
European Parliament approves increase in bank deposit guarantee
2009 elections - Economic and monetary affairs - 18-12-2008 - 12:45
Plenary sessions
Plenary sessions
If a European bank fails, citizens' savings should be guaranteed up to €100,000, says the European Parliament, endorsing a Commission proposal to raise the deposit guarantee to this amount. MEPs also decided that bank customers should be given faster access to their deposits in emergencies and that a mechanism be established for cross-border cooperation in the event of another economic crisis.
MEPs adopted a report by Christian Ehler (EPP-ED, DE) with 556 votes in favour, 21 against and 3 abstentions, to amend existing legislation on deposit guarantee schemes and raise the guarantee level in the event of deposits being unavailable. The aim of this new legislation, which may be approved in only 9 weeks since the Commission put forward its proposal, is to "bring some calm in the financial market" as the rapporteur explained during a press conference in the EP.
The report, which also modifies the deadline for payouts and proposes setting up an emergency fund, reflects an agreement reached with the Council for an immediate approval.
Agreement to raise the deposit guarantee level
Members approved the Commission proposal to raise the level of guarantee to at least €50,000 when the new legislation enters into force in June 2009. They considered the current level of protection, set at €20,000, to be inadequate for a large number of deposits in the EU.
The proposed increase to €100,000 will only be effective by the end of 2010, as agreed by the Parliament and the Council. MEPs also amended the proposal so that this increase will take effect unless a Commission impact assessment, to be ready by 31 December 2009, suggests it is not financially viable for all Member States.
The coverage level will apply to all depositors in all Member States, regardless whether the currency is the Euro or not.
Faster payouts and an emergency fund
MEPs agreed to reduce the payout period, in the event of deposits being unavailable, from three months to 20 days. The extension of this period, up to maximum 10 days, could only be admitted in exceptional circumstances and by approval of competent authorities.
MEPs also called on Member States to consider setting up an emergency pay-out system to make an appropriate amount available to the depositor within three days or less. The objective is to make "a positive impact on the confidence of depositors and the proper functioning of the financial markets".
After the approval of Parliament's plenary, the Council has to formally endorse the new legislation and Member States will be required to bring it into force by 30 June 2009 at the latest.
REF.: 20081216IPR44861