The deposit guarantee schemes framework is one of the three pillars of the banking union, alongside the single supervisory mechanism and the resolution framework. The goal of this legislative proposal is to safeguard deposits under €100,000 in EU member states through ex-ante financing for national funds, paid for by banks and not by taxpayers. A political agreement between the Council and the European Parliament was finally achieved on 18 December.
Deposit guarantee schemes for deposits under €100,000 should reach 0.8% of deposits covered in 10 years and should be funded by 70% of contributions in cash and according to the risk profile of the bank. The pay-out period would be seven working days, with transitional measures up to 2024, as well as an early pay-out system within five working days to cover immediate living costs. Member states need to allow for cover beyond the level of €100,000 for temporary high balances such as the results of selling a residential property. The agreement also specifies that the scheme could be used for preventative action (under strict conditions) and should be applied within 12 months of its entry into force.