EU approves agreement for enhancing depositor protection

The Council of the European Union on Tuesday approved a political agreement reached with the European Parliament aimed at further harmonizing EU rules on deposit guarantee schemes (DGSs) and enhancing depositor protection. Under the agreed directive, all banks will be required to join a DGS so that all their covered deposits are protected. DGSs must be supervised on an ongoing basis and have to perform regular stress tests of their systems. The deal envisions further reduction of the time limit for paying out depositors from the current 20 working days to seven working days by 2024. "It's a very important achievement especially regarding the protection of the depositors in those member states that have been more severely hit by the financial crisis, " said the EU Eco-Fin president and also Greek Finance Minister Yannis Stournaras.