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EU-wide deposit guarantee agreed

Published 07/10/2008

Europe's finance ministers this afternoon agreed an EU-wide deposit guarantee for savers of €50,000.

That is the amount of consumers' cash which will be protected in future if their bank crashes - but the figure is only half the amount many ministers wanted to fix as the threshold to calm markets as financial turmoil continues.

The move was agreed in Luxembourg as ministers vowed to step up cross-border co-operation in the face of banking chaos and issued a statement declaring: ``The liquidity of the financial system shall be ensured by all authorities in order to preserve confidence and stability.''

The meeting began with a figure of €100,000 on the table as the level up to which savers' investments would be guaranteed across 27 countries.

But that was seen as too high by some ministers - Sweden, for instance, has only just moved to a new domestic deposit protection level of €40,000.

The UK has just upped the national figure to £50,000 pounds - €64,000.

This afternoon's statement said all member states would ``for an initial period of at least one year'' provide deposit guarantee protection for individuals of at least €50,000, compared with the current EU figure of €20,000.

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