EU pressures Cyprus to adopt bank deposit guarantee schemes – Cyprus Mail Cyprus Mail

A March 2009 directive required member states to increase coverage of their Deposit Guarantee Scheme – first, to at least €50,000, and then, to a uniform level of €100,000 by the end of 2010.The new directive confirmed that €100,000 is an appropriate level of protection and provides that the DGS must be able to fund at least 0.8 per cent of covered deposits by 2024.

[…] A banking source said there were no EU countries with a DGS that had enough cash to compensate depositors of a systemic bank in case of bankruptcy.

It is understood that Cyprus’ fund had around €100mln. […] Insured deposits in Cyprus were €22.5bln.

Source: EU pressures Cyprus to adopt bank deposit guarantee schemes – Cyprus Mail Cyprus Mail

Very interesting. Just in case you were wondering how protected your first 100.000 euro are: not much. This will be tested again at some point, and Europe already has the answer in the „Single Resolution Mechanism” that provides haircuts to depositors, bondholders and bank shareholders, as big as needed, to recapitalize failing banks.

Yes, it is as crazy as it sounds.

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