Speaking before the vote, rapporteur Peter Simon (S&D, DE) said that the changes to the current legislation were necessary to make sure that banks themselves, not taxpayers and states, would be in the frontline of any measures to protect depositors. The new rules will also ensure there are stronger and more uniform standards across the EU.

Striking the right balance

Mr Simon stressed that his focus had been on improving the balance between more harmonisation at EU level, while giving Member States room to address national specificities. "The text adopted today offers the same levels of protection and stability across the EU but also gives space to address the different realities, while ensuring that there will be no distortion", Mr Simon said.

Most specifically, the committee allows more room for the schemes to carry out preventative measures aimed at keeping a bank fully functional. Thus, whereas the Commission proposal allows only one third of a scheme's funds to be used for this purpose, the EP committee provides considerable leeway for a scheme to use nearly all its funds in this direction, provided the members of the scheme are, together, considered by supervisors to be able also to honour any payout obligations that may arise.

Filling the pots

A scheme must reach a target fund level of 1.5% of all deposits which it guarantees. But whereas the Commission proposes to reach such a level gradually within 10 years, MEPs extend this to 15 years, arguing that this would allow EU banks to remain internationally competitive. This extension, however, still places an obligation on banks to pay up their contributions rather than only make cash pledges, as advocated by some Member States and MEPs.

Similarly to the Commission proposal, MEPs support a "polluter pays" principle, whereby banks with greater risk profiles would be required to contribute more than banks with average risk. Risk levels would be determined through a standardised method to be devised by the European Banking Authority. The committee says the riskiest banks could pay 2½ times more than the average; the Commission only doubled the contribution for the riskiest banks.

Five day payout deadline

Depositors should receive their guaranteed savings within five working days, although until the end of 2016 Member States may decide to apply a 20 working day payout deadline. Even in the second scenario though, depositors would still be able to receive €5,000 within five working days. The Commission proposed a seven working day deadline.

Information about 'vulnerable' deposit

The committee would require banks to inform depositors in the event that their deposits are not guaranteed by a deposit guarantee scheme, and depositors must be offered the chance to withdraw their money without any penalties. Lastly, depositors are to be informed very directly about how they are protected through their account statements.

Next steps

Over the coming months, MEPs and Member States will need to thrash out a deal. Decision-making power is shared equally between the two sides. Member States have yet to adopt their common position but will seek to do so this week.

Press release