Deposit Guarantee Schemes Directive

The Deposit Guarantee Schemes Directive (DGSD), first adopted in 1994, governs the operation of deposit guarantee schemes across the European Economic Area. This includes the UK’s Financial Services Compensation Scheme.

The DGSD was amended in March 2009, following the financial crisis with the main change being an increase in the coverage level to €100,000 by 31 December 2010. The Commission has since conducted a full review and in July 2010, adopted a proposal to revise the Directive. The Commission’s proposals include:

Increasing the coverage limit – the proposal confirms the increase of the coverage limit to €100,000. Member States outside the Eurozone can set the limit in their own currency using a value equivalent to €100,000 at the date on which the Directive comes into force – in the UK, £85,000.
Swifter payouts for depositors – The Directive provides for depositors to be reimbursed within seven days of a bank failure
Acting on behalf of other Member States’ schemes – The Directive specifies that customers holding accounts in other Member States would have their funds repaid by the national scheme where they live, rather than where the bank is headquartered. The host scheme would also be responsible for communication with depositors.
Improving scheme financing – The Commission has also put forward proposals to ensure the sound financing of schemes which seeks to address the quality and consistency of financing across Member States.

The European Commission’s consultation paper can be downloaded as follows:

Revision to the Deposit Guarantee Scheme Directive (July 2010) (PDF) (opens in new browser window)

Deposit Guarantee Schemes Directive

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