European Union (EU) finance ministers agreed on Tuesday to significantly raise the minimum deposit guarantee which member states must offer savers, aiming to restore financial stability.
"We agreed that all member states would, for an initial period of at least one year, provide deposit guarantee protection for individuals for an amount of at least 50,000 euros (67,500 U.S. dollars)," the ministers said in a conclusion after a monthly gathering.
Currently, EU law requires member states to guarantee savers' deposits of at least 20,000 euros (27,000 dollars) in case of a bank failure.
But in the aftermath of the financial crisis, several EU countries have already decided to increase their minimum guarantee for bank deposits in a bid to calm savers' concern about their money in struggling banks.
Ireland, followed by Germany and Denmark, even provided full guarantee of all private bank deposits in hope of boosting confidence, putting pressure on others to follow suit.
For other countries, lower guarantee level would put their banks at an disadvantage.
Meanwhile, EU finance ministers acknowledged that many member states wanted to raise their minimum to 100,000 euros (135,000 dollars).
French Finance Minister Christine Lagarde, whose country holds the EU rotating presidency, said the amount was finally set at 50,000 euros (67,500 dollars) because the capacity of smaller countries should be taken into consideration.
Source:Xinhua
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