On the 12th July 2010, Michel Barnier, the European Commissioner for Internal Market and Services, presented a Proposal that aims at harmonising the law on deposit guarantee schemes.
The reason behind such Proposal being put forward so soon after the recent amendments to the regime, was due to the fact that “swift negotiations precluded tackling all the open issues, [and the] Directive was only an emergency measure to maintain depositors’ confidence, in particular by increasing the coverage level.” Indeed, it had already been established that the existing Deposit Guarantee Scheme (hereinafter to be referred to as ‘DGS’) system was inadequate and did not seem to implement the objectives set out in Directive 94/19/EC on Deposit Guarantee Schemes vis-à-vis “maintaining depositors’ confidence and financial stability in times of economic stress [and the] schemes have proved to be underfinanced in times of financial stress”.
If this Proposal is employed a number of changes will come into effect. The most significant one would be that of harmonising the funding mechanisms of compensation schemes as well as introducing risk-based contributions throughout the European Union. It is well-worth noting that quite a few of these proposals had already been envisaged by the Maltese legislator when amending the local regime following Directive 2009/14/EC.
