EU Directive on Deposit Guarantee Schemes comes into effect

The EU Directive on Deposit Guarantee Schemes has come into effect in Irish law.

The deposit guarantee scheme protects deposits up to €100,000 in the event of a bank, building society or credit union being unable to repay them.

This maximum protection level per person per credit institution is unchanged.

However, the directive introduces a gradual reduction in compensation payment deadlines, broadened scope of coverage of deposits across the EU and the provision of improved information by banks and credit unions to depositors, to ensure that they are aware of the key aspects of protection of their deposits by the Deposit Guarantee Scheme

The European Commission yesterday asked Belgium, Cyprus, Estonia, Greece, Italy, Luxembourg, Poland, Romania, Slovenia and Sweden to transpose into national law the directive.

The formal request is the first step in a legal procedure which will end in the Commission suing these countries in the EU’s highest court if they do not take action within two months.