Savers with over €100,000 could be hit if bank gets into trouble after EU shake-up
LARGE depositors could suffer losses from 2016 onwards if their bank gets into serious trouble.
A provisional European deal means those with more than €100,000 on deposit will be among those potentially hit if a bank is in difficulty and needs funds.
The move is designed to shift the burden of having to bail out lenders from the taxpayer and onto banks, bondholders, shareholders and, in a last resort, wealthy savers.
Those with funds of up to €100,000 will be protected and their savings, as Finance Minister Michael Noonan said earlier in the year, will be treated as "sacrosanct".
The rules were not supposed to come in until 2018, but have been brought forward to 2016 after talks between negotiators for the European Parliament and the Lithuanian Presidency of the EU.
The move, known as bail-in, is similar to the treatment earlier this year of big depositors in Cyprus, when the island state was bailed out and those with more than €100,000 in the banks also faced losses.
The EU Commissioner responsible for the reforms, Michel Barnier, said it was a "big step" to ensure that "taxpayers are no longer in the front line to pay for banks' mistakes".
"With these new rules in place, massive public bailouts of banks and their consequences for taxpayers will finally be a practice of the past," Mr Barnier said.
It will now go to EU ministers for approval next week and if given the green light, it will lay down rules for closing a bank in any of the 28 countries in the EU, ensuring that it is not only shareholders and governments who have to foot the bill.