News | Wednesday, 08 October 2008

Bank deposits guaranteed to €50,000 minimum

David Darmanin

As Malta’s official position will be announced upon Finance Minister Tonio Fenech’s return from Luxembourg, international reports can confirm that EU governments will be guaranteeing bank deposits up to €50,000 or €100,000, according to the affordability of the country in question.
At the EU Finance Ministers meeting held over the past four days, French Minister Christine Lagarde sought to persuade a blanket raise to €100,000 for all countries – a steep jump from the current minimum of €20,000. But smaller nations succeeded in getting the objective halved to €50,000, while other countries such as Spain and Austria have compromised to insure €100,000 as initially proposed.
The current financial turmoil across Europe has started to show signs of fear among depositors, whose possible alienation from using banks could have very serious repercussions on European economy.
Although banks in Malta are not expected to be directly impacted by the current financial turmoil, fears rubbing off to local depositors may adversely affect banks’ lending power, which is worked out on a percentage of the total amounts deposited. This move is aimed at regenerating depositor confidence.
Yesterday morning, before the decision was taken, this newspaper sought an update on the situation from a Finance Ministry Spokesperson, who replied saying: “The Minister is discussing precisely these issues at the Ecofin Council in Luxembourg. Hopefully concerted EU action/position will be agreed upon. We will update the press with what happens.”

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