May 20, 2013 / 7:42 PM / 7 years ago

Wealthy bank depositors to suffer losses in EU law

BRUSSELS (Reuters) - A draft European Union law voted on Monday would shield small depositors from losing their savings in bank rescues, but customers with over 100,000 euros in savings when a bank failed could suffer losses.

On Monday, a group of European lawmakers in the house’s economics committee voted that, from 2016, large depositors in the European Union might suffer losses if a bank gets into serious trouble, echoing a deal in Cyprus where wealthy depositors were hit hard at two banks to save the country from bankruptcy.

Under the EU proposal, a bank would only dip into large deposits of over 100,000 euros once it had exhausted other avenues such as shareholders and bondholders.

The draft law will need the approval of the EU’s 27 finance ministers and the over 750 lawmakers in the parliament before it can become law.

Reporting By Claire Davenport. Editing by Andre Grenon

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