The European Commission has published a set of tough new proposals aimed at guaranteeing the deposits of so-called “small account holders”. The aim is to restore confidence in the banks – which was badly dented – during the Northern Rock debacle in the UK for example when people feared they had lost their savings.
Michel Barnier, the EU’s Internal Market Commissioner told a news conference: “We don’t want to wait for a new Madoff case in Europe before we improve protection for European investors.”
The proposals would mean that people with up to 100,000 euros in a European bank account would be guaranteed not to lose their money in the case of the bank going bust.
The proposals were part of a range of measures aiming to avoid governments having to bail banks out again in the future and were broadly welcomed the European Consumers’ Organisation.