Business

Bank customers across the European Union are facing the prospect of a Cyprus style bail-in if a financial institution gets into trouble. The EU’s Economic Committee has approved a draft law meaning banks needing rescuing could take cash from customer accounts. Larger depositors in Cyprus suffered this very fate during the financial crisis on the island earlier this year. They contributed in total some six billion euros to the package which... more 

Bank customers across the European Union are facing the prospect of a Cyprus style bail-in if a financial institution gets into trouble. The EU’s Economic Committee has approved a draft law meaning banks needing rescuing could take cash from customer accounts. Larger depositors in Cyprus suffered this very fate during the financial crisis on the island earlier this year. They contributed in total some six billion euros to the package which bailed out the island. Under the new proposals accounts with less than 100,000 Euros would be secure. But customers could lose some or all of their cash over 100,000 Euros. The proposal is meant to ensure taxpayers will not have to contribute to banks which are ‘too big to fail’. The final decision on the proposal has to be made jointly by the Euro Parliament and the 27 member states. If they agree, the law comes into force in 2016. Across the EU, a total of 1.7 trillion Euros has been given to banks since the crisis of 2008. less