Deposits guaranteed for three years

National Economy and Finance Minister Giorgos Alogoskoufis said yesterday a soon-to-be-introduced 100,000-euro state guarantee on bank deposits will apply for three years. Seeking to boost confidence in banks, on Tuesday EU finance ministers agreed to raise the minimum level of insurance on deposits across the 27-nation bloc to 50,000 euros. Greece is one of a number of EU states to go beyond the minimum deposit insurance. «Our intention is to legislate the increase in the guarantee to 100,000 euros for three years,» Alogoskoufis said. «The financing of this will be via the country’s deposit guarantee fund (TEK). Preparation of the law will start today.» TEK had assets of almost 1 billion euros last year. Bankers estimate Greek bank deposits at 230 billion euros. Ministry sources said the guarantee will apply to any saver who has parked funds in banks operating in Greece. European governments are struggling to shelter banks and depositors from the financial crisis that has snowballed from the United States and is now rattling confidence, pummeling stocks and paralyzing lending between banks. Last week, Greece said its banking system remained safe and solvent and hinted it was considering raising the level of deposit guarantees to calm citizens, amid media reports that worried savers were withdrawing savings from banks.

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