22/12/2008 - Small businesses get refund promise
New European legislation will better protect the savings of small businesses should banks fail.
MEPs have voted in favour of the legislation, which will increase the guarantees from €20,000 (£18,800) to €100,000 (£94,160) for all bank customers, including small businesses, which were not covered by the initial proposals.
The commission's initial plans for the legislation were to increase guarantees to €50,000 (£47,080), but customer accounts have been given extra security with the increased sum.
In addition to the increase the legislation requires that all funds must be repaid within 14 days and not three months under the previous system.
John Purvis, Conservative MEP and vice-president of the parliament's economic and monetary affairs committee said: "Enhancing guarantees for bank deposits is crucial in returning consumer confidence to the banking sector. People who have saved for their entire lives should not lose their nest eggs because of the failure of regulation and the banks.
"We have voted to add small businesses to the guarantee scheme. Many would have been completely exposed by bank failures and we must ensure they are safeguarded."
Copyright © Press Association 2008
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