FRANKFURT, Aug 29 (Reuters) - New European bank safety plans will force Germany's public-sector lenders to top up their deposit protection scheme by more than 3 billion euros ($4 billion), two people familiar with the matter told Reuters on Thursday.
German savings banks and Landesbanken, which have about 800 billion euros in deposits, are in early-stage negotiations over how to implement the new rules which form a main pillar of Europe's plans for a banking union.
The Landesbanken and Sparkassen are in talks over who should take on the main burden of topping up the scheme, since it is already clear that the existing safety net for bank savings will need to be changed.
European proposals require lenders to set aside cash reserves for at least 1 percent of deposits worth up to 100,000 euros.
The rules will force Germany's savings banks top up their own deposit insurance scheme, which has until now relied mainly on guarantees of mutual support rather than hard cash reserves.
A spokesman for the DSGV, Germany's savings bank association, said on Thursday he was confident about reaching an agreement in the foreseeable future.
Germany's public-sector lenders include Helaba Landesbank Baden Wuerttemberg, Nord LB and Bayern LB.
Last month, the European Commission outlined plans to set up an agency to salvage or shut failing eurozone banks, a long-awaited scheme some immediately criticised as too weak and which Germany attacked as out of step with EU law. ($1 = 0.7496 euros) (Reporting by Andreas Kroener; Writing by Edward Taylor; Editing by David Holmes)