Proposals on Deposit Guarantees and Investor Protection

The Commission has proposed amendments on the EU legal framework for deposit guarantee schemes, investor protection schemes and has launched a public consultation on options to improve protection for insurance policy holders.

On deposit guarantee schemes the Commission proposes:

  • Upgrade of deposit protection to € 100 000 by the end of 2010;
  • Bank account holders will be reimbursed within seven days;
  • Deposit schemes in the country of residence will provide administrative support for deposit claims from failing banks in other Member States;
  • A new easy to understand standard template for deposit guarantee schemes;
  • A four-step approach for funding deposit guarantee schemes – ex-ante financing, ex-post contributions, mutual borrowing among deposit schemes, and contingency funding arrangements.

On investor protection the amendments are:

  • Increase of protection to € 50 000 per investor;
  • Compensation at the latest 9 months after the investment firm’s failure;
  • A minimum target fund level will be introduced which needs to be fully pre-funded;
  • Expansion of protection to cover third-party custodian failure.

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