Bank deposit guarantee schemes must return €5,000 of a depositor's money within a week of being asked, wherever a struggling bank is unable to do so, says draft legislation voted on Thursday. The text also requires riskier banks to contribute more to the schemes than others and says that funding for each scheme should equal 1.5% of the deposits that it covers.
As Parliament's talks with Member States on a directive for a stronger deposit guarantee system have stalled, MEPs voted to move to a second reading in a bid to build pressure to reach a deal. The overall aim of this legislation, steered through Parliament by Peter Simon (S&D, DE), is to make permanent the temporary system put in place to guarantee up to €100,000 of a person's deposits in a bank.
Subsistence money within a week
By January 2017, deposit guarantee schemes should be required to return up to €100,000 of a depositor's money within one week the adopted text says. Until then it adds, Member States may apply an exception extending this deadline to 20 working days, provided however that €5,000 is made available to a depositor within a week of his/her request.
Some Member States are against the €5,000 quick payout but MEPs argue that it is necessary to enable people to meet their daily basic needs until the guarantee scheme returns the remainder of their deposits.
Risky banks to pay more
Like the Commission proposal, MEPs support a "polluter pays" principle, whereby banks with higher risk profiles would be required to contribute more than those with average risk ones. Risk levels would be determined through a standardised method to be devised by the European Banking Authority.
The text stipulates that the riskiest banks could pay 2½ times more than the average. Member States are currently resisting this approach, arguing that contributions should be based on the amount a bank holds in deposits rather than on how risky its activities are.
Credibly funded schemes
The adopted text sets the level of funding for each scheme at 1.5% of the deposits covered, to be reached within 15 years of the directive's entry into force. Member States want the figure to be set at only 0.5%, an amount considered insufficient by MEPs to lend credibility and effectiveness to the schemes when the time comes for them to be activated.
The text was approved with 506 votes in favour, 44 against and 21 abstentions.
The Council must now state its position. Once it does so, Parliament and Member States will have a maximum of 4 months to reach a deal. Decision-making power is shared equally between the two sides.
Procedure: Co-decision (1st reading)