EU Commission: new law could include bail-in of uninsured deposits

Hi,

I am uncertain of what this means; so if anybody could explain?


Link -

"In the Commission's proposal, which is under discussion, it is not excluded that deposits over €100,000 could be instruments eligible for bail-in," spokeswoman Chantal Hughes told a regular briefing. "It is a possibility."

Deposits over €100k are open to having a percentage of the amount over €100k seized, in Cyprus those having deposits effectively stolen are being offered a trade of their percentage cash lost which could be up to 40% of the amount deposited over the €100k threshold for worthless bank shares.

Could it happen here....well according to that report and that draft law yes it could, would it, well anything is possible now, the rules have changed.

It already has happened here with IBRC. Term deposits, placed in 2008, above 100,000 EUR ,were recently burnt at IBRC.

I see nothing wrong with looses being imposed on depositors, above the high insurance levels, when a bank goes into insolvency. As long as the small guy is protected. It happens very frequently in the USA.

If you have above 100,000 EUR on deposit you need to need to be aware that the excess of 100,000 might end up being part of the unsecured creditors pot. Easy to mitigate against this via deposits in multiple institutions.

Ciaran T,
you say, "it happens frequently in the USA". Could you provide the exact link for that please?

Logically though this should mean higher interest rates for sums greater than €100,000.

noproblem said:

Ciaran T,
you say, "it happens frequently in the USA". Could you provide the exact link for that please?

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Sure. See here [broken link removed]. "All deposits assumed" were below FDIC levels.

Deposit insurance in the states is 250,000 USD. In 51 banks last year, people with more than the insurance level lost part/all of their deposits, above 250,000, as part of the orderly liquidation of the bank.

I assume that joint accounts would be €200k guaranteed? What about current accounts? With interest rates so low and DIRT tax so high together with PRSI why not keep larger sums in the current account?

Thank all for the replies everybody;

Tingagel - I would assume myself that joint accounts of 200K would still be protected if 100K is held by each person e.g. a 50/50 Capital investment by both parties?

Apologies if this has been answered in another thread here, but I would like to ask for opinions with regard to the An Post State Savings Certificates, Savings Bonds and also the National Solidarity Bonds;

Specifically for each of these State Savings Certificates/Bonds there is a upper limit for each person to invest e.g. 120K for the Certificates and for the Solidarity Bonds a limit of 250k. As these products are sold to people as being protected by a State Guarantee rather than the Deposit Guarantee -

What are people's opinions with regard to the safety of people's savings held within these State Savings Products?

Tintagel said:

I assume that joint accounts would be €200k guaranteed? What about current accounts? With interest rates so low and DIRT tax so high together with PRSI why not keep larger sums in the current account?

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100,000 EUR per person per institution is insured. Hence, yes, 200,000 EUR in a joint account.

Current accounts have the same insurance as savings accounts.

You will earn little or no interest on a current account. You are better off with a savings account.

andycole said:

What are people's opinions with regard to the safety of people's savings held within these State Savings Products?

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State Savings are as safe as the credit worthiness of the state.

Bond yields are low indicating investor confidence at the moment in the credit worthiness of the state.

However, the debt load on the state is arguably still unsustainable.