If a European bank fails, citizens' savings should be guaranteed up to €100,000, said the Economic and Monetary Affairs, endorsing a Commission proposal to raise the deposit guarantee to this amount. The committee also proposed that holders be given faster access to their deposits in emergencies and that a mechanism be established for cross-border cooperation in the event of another economic crisis.

The committee approved a report by Christian Ehler (EPP-ED, DE), which, if approved by Parliament in plenary session, would amend existing legislation on deposit guarantee schemes and raise the guarantee level in the event of deposits being unavailable. The report also modifies the deadline for payouts and proposes setting up an emergency fund.

Agreement to raise the deposit guarantee level

Committee members approved the Commission proposal to raise the level of guarantee to at least €50,000 when the new legislation enters into force and to €100,000 by the end of 2009. They considered the current level of protection, set at €20,000, to be inadequate for a large number of deposits in the EU.

The committee nonetheless amended the proposal so that the increase will take effect unless a Commission impact assessment, to be ready by April 2009, suggests it is not financially viable for all Member States.

Faster payouts and an early warning system for future crisis

The committee also agreed to reduce the payout period, in the event of deposits being unavailable, from three months to 14 days. MEPs also called for a payment of at least €1,000 to be made available to the depositor for emergency needs within three days.

MEPs asked the European Commission to propose, by the end of 2009, a series of measures and procedures to ensure co-ordination among all Member States in the event of another cross-border financial crisis. This proposal should include provisions for a more effective early warning system for risks, they add.

If the new legislation is endorsed at Parliament's Strasbourg plenary session and subsequently by the Council, Member States will be required to bring it into force by 31 December 2008 at the latest.