In Austria from July 2015 bank deposits will no longer enjoy State protection or State guarantees in the event of a bank run and a bank collapse. Up to now €100,000 was guaranteed; 50% by the bank and 50% by the government. The frightening thing is Austria isn’t a peripheral European country, its actually part of the EU’s “Hard Core”. The plan is to replace the State guarantee with an insurance fund of up to €1.5billion over the next 10 years. €1.5billion equates to c. 0.8% of total Austrian deposits which is completely inadequate. It would be comical, if it wasn’t so serious!

Our own Minister of Finance famously declared in July 2013 that “Bail-ins is now the rule”. Noonan admitted at the time that the move to not maintain deposits as sacrosanct was “a revolutionary move”.

Most depositors and investors remain very unaware of the risks to their deposits and to the wider financial system.

The framework for legislation was agreed in the EU 2 years ago. Just last month the European Commission ordered 11 EU countries to enact the Bank Recovery & Resolution Directive (BRRD) with 2 month or be hauled before the EU Court of Justice. Of course this news item didn’t get wide spread media coverage despite the risk for savers and depositors thoughout the EU.

Essentially what all this means is, if you deposit money in a bank you are regarded as an investor or a lender to that bank. If the bank performs poorly the EU is now saying you have made a bad investment and your capital is at risk. In the past depositors weren’t risk takers, according to the law they are now!!