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Deposit guarantee schemes

EU legislation protects deposits in case of bank failure.

What the EU is doing and why

Deposit guarantee schemes (DGS) reimburse up to a certain amount to compensate depositors whose bank has failed. A fundamental principle underlying DGS is that they are funded entirely by banks, and that no taxpayer funds are used.

 Under EU rules, deposit guarantee schemes

  • protect depositors' savings by guaranteeing deposits of up to €100 000
  • help prevent the mass withdrawal of deposits in the case of a bank failure, which can create financial instability

The EU has gradually increased the level of deposit protection since the first directive for DGS was introduced in 1994.

Policy making timeline

  1. 18 April 2023
    Legislative proposal - Deposit guarantee schemes  
  2. 25 February 2021
    Consultation - Bank crisis management and deposit insurance framework
  3. 16 April 2014
    Legislation - Deposit guarantee schemes

    The EU adopted Directive 2014/49/EU. It requires EU countries to introduce laws setting up at least 1 DGS that all banks must join.

Relevant legislation