EC proposes increasing bank deposit compensation to €100k

The European Commission is set to increase the level of compensation for bank depositors to €100,000 and is proposing returning lost money within seven days if a bank collapses.

In a paper published today, the EC plans to adopt a package of EU-wide measures to create a sound financial system.

The increase in compensation level will mean 95% of all bank account holders in the EU will get all their savings back if a bank fails.

In order to speed up payouts, managers of deposit guarantee schemes will have to be informed early about problems at banks by regulators and banks will have to specify in their books whether deposits are protected or not.

Compensation will also increase for customers of investment services if the service fails due to fraud, administrative malpractice or operational errors. It will rise from €20,000 to €50,000.

EC internal markets and services commissioner Michel Branier said: ‘The adoption of today’s package marks the commission’s latest endeavour to bring transparency and responsibility to Europe’s financial system in order to prevent and manager future crises.

‘European consumers deserve better. They need reassurance that their savings, investments, or insurance policies are protected no matter where in Europe they are based. To make this a reality, I now call upon the European Parliament and the council to make rapid progress in approving today’s package.’