Bank Deposits No Longer Guaranteed By Austrian Government
By: GoldCore
GoldSeek.com
Thursday, 9 April 2015
– Austria will remove state guarantee of bank deposits
– Austrian deposit plan given go ahead by the EU
– Banks to pay into a deposit insurance fund over 10 years
– Fund will then be valued at a grossly inadequate €1.5 billion
– New bail-in legislation agreed by EU two years ago
– Depositors need to realise increasing risks and act accordingly
– “Bail-ins are now the rule” and ‘Bail-in regime’ coming
Bank deposits in Austria will no longer enjoy state protection and a state guarantee in the event of bank runs and a bank collapse when legislation is enacted in July. The plan to ensure that the state is no longer responsible for insuring deposits has been readied by the Austrian government in conjunction with the EU two years ago according to Die Presse.
Currently, Austrians have their bank deposits guaranteed to a value of €100,000 – the first half to be provided by the failing bank and the other by the state. From July, however, the state will be removed from the process and a special bank deposit insurance fund is to be set up and paid into by banks to meet potential shortfalls.
The fund will be filled gradually over the next ten years to a value of €1.5 billion. In the the event of a failure of a major bank in the intervening period the legislation will allow the fund to borrow internationally although who will provide such funding and on what terms is not clear, according to Austria’s Die Presse.
However, even when the scheme is fully funded it is clear that €1.5 billion will be woefully inadequate to deal with a bank failure.
The Rest…HERE
