Plans from Brussels put the onus on bank depositors, rather than the taxpayer, to bear the costs of bank failures.
\”Cyprus was a special case … but the upcoming directive assumes that investor and depositor liability will be carried out in case of a bank restructuring or a wind-down,\” Mr Rehn, the European Economic and Monetary Affairs Commissioner.
\”But there is a very clear hierarchy, at first the shareholders, then possibly the unprotected investments and deposits. However, the limit of €100,000 (£85,000) is sacred, deposits smaller than that are always safe.\”
Mr Rehn was referring to a directive being drafted by the European Commission on bank safety which would set out investor liability in the law of member states.
And, at least as far as I know, it\’s how UK law currently is.