The European Parliament has issued a press release stating that it has reached political agreement with the Council of the EU on the draft Directive recasting the Deposit Guarantee Schemes Directive.

The press release notes key areas of agreement including:

• that funds for deposit guarantee schemes should reach a target of 0.8% of covered deposits within 10 years of the recast Directive coming into force;
• the 0.8% target could be reduced to 0.5% in the case of “concentrated banking sectors”, where banking assets are concentrated in the hands of a few banks;
• banks will contribute to the funds according to their risk profiles, with those exercising riskier activities, contributing more; and
• compensation payments to be made within 7 working days for the entirety of a deposit and 5 working days for a sum allowing the depositor to cover the cost of living in that country. Member States will be allowed to deviate from the 7 day limit but only until 2024.

View EP and Council negotiators break depositor-taxpayer link, 18 December 2013