Deposit protection

Austrian banks warn against EU plans

The latest resolutions of an EU parliamentary committee are causing great concern in the Austrian financial sector. According to the plans, half of the resources of the national deposit guarantee funds are to be transferred to a European pot. A European resolution authority is to be able to access these funds. 

The Austrian National Bank warns that this would require significantly higher allocations to the deposit guarantee funds in the future. The OeNB welcomes the efforts to be better equipped for times of crisis. However, this involves a "potentially serious system change", as Deputy Governor Gottfried Haber points out.

According to the OeNB, the Austrian deposit guarantee system is cost-efficient and has proven its worth in recent years. And the deposit protection funds are very well filled at around two billion. euros are very well filled. The Austrian protective shield protects depositors against possible losses of 100,000 euros and, in special cases, up to 500,000 euros if the bank is no longer able to pay out the money.

WKÖ: "Misses the point of depositor protection"
"If European resolution authorities are able to access the resources of the deposit guarantee funds in future, this clearly misses the point of protecting savers," criticizes Willi Cernko, Chairman of the Federal Banking and Insurance Division of the Austrian Federal Economic Chamber (WKÖ), in a press release.