EU seeks huge boost to minimum savings guarantee

7 October 2008

LUXEMBOURG — The European Union’s finance ministers are set to call for a massive boost to the minimum level of bank deposit which member states guarantee, diplomats said Tuesday.

Current EU laws state that governments should, as a minimum, guarantee deposits of EUR 20,000 (USD 27,200), but the recent swathe of bank collapses and state interventions has led to calls for that figure to be radically revised.

Individual member states are pushing for figures ranging from EUR 40,000 up to EUR 100,000, diplomats said.

At present, deposit guarantees differ widely across the EU, with member states scrambling to boost their national programmes in the face of the ongoing financial crisis.

While official proposals to change the minimum deposit guaranteed would have to come from the EU’s executive, the European Commission, a political agreement between the finance ministers of the EU’s 27 member states would greatly speed up the process.

On Monday evening, EU Economic and Monetary Affairs Commissioner Joaquin Almunia said that his organization was already working on a new proposal aimed at boosting the minimum guarantee and speeding up the process by which guarantee schemes pay out in times of crisis.

[dpa / Expatica]