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Europe's Bank Guarantees

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Bank Guarantees

Countries across Europe have moved to reassure banking customers by guaranteeing deposits. Fear of runs on banks prompted some account holders to take their money overseas to foreign banks, protected by government pledges, or simply opt for the relative safety of keeping funds out of institutions.» »

European finance ministers moved to reassure banking customers by agreeing to raise the threshold for bank-deposit guarantees to 50,000 euros ($67,930), from the current level of 20,000 euros, Reuters reported. The move comes after some countries promised unlimited protection for savings, for fear of bank runs.

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Ireland

Ireland was the first government to act on Sept. 30 and sparked the current flurry when it promised depositors that the liabilities of six Irish-owned banks, totaling some $575 billion, would be insured for the next two years. The move heaped pressure on other European countries and attracted calls of anti-competitive behavior.» »

Ireland was the first government to act, sparking the current flurry of activity. On Sept. 30, the government promised depositors that the liabilities of six Irish-owned banks, totaling some $575 billion, would be insured for the next two years. It later broadened the guarantee to cover savings in five foreign-owned institutions.  
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Greece

Reports of Greek savers rushing to withdraw their cash prompted the country's cabinet to pledge protection for all bank deposits on Oct. 2, no matter what their size. The government's current protection only covers funds up to $27,890. The increase would have to approved by its parliament.  » »

Reports of Greek savers rushing to withdraw their cash prompted the country's cabinet to pledge protection for all bank deposits, regardless of their size, on Oct. 2. The increase would have to be approved by Greece's parliament.  

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Germany

Despite earlier criticism of Ireland's move, Germany quickly followed suit on Oct. 5 by saying it would guarantee all private bank accounts, which would cover some $785 billion in savings. The move came as the government stepped in to shore up German banking giant Hypo Real Estate.» »

Despite earlier criticism of Ireland's move, Germany quickly followed suit on Oct. 5,  saying it would guarantee all private bank accounts, an estimated $85 billion in savings. The move came as the government stepped in to shore up the giant Hypo Real Estate.

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Denmark

Denmark guaranteed all of its bank deposits on Oct. 6, in a deal funded by the country's commercial lenders, which agreed to provide as much as $6.5 billion over the next two years. The sum is equal to 2 percent of the country's gross domestic product. » »

Denmark guaranteed all of its bank deposits on Oct. 6, in a deal funded by the country's commercial lenders, which agreed to provide as much as $6.5 billion over the next two years. The sum is equal to 2 percent of the country's gross domestic product.

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Sweden 

The Swedish government announced plans to double the level of its bank deposit guarantee to $71,310 on Oct. 6. Swedish Finance Minister Anders Borg said the decision was part of "crisis management."  » »

The Swedish government announced plans to double its bank deposit guarantee to $71,310 on Oct. 6. Swedish Finance Minister Anders Borg said the decision was part of the "crisis management." 

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Austria

The Austrian government looked set to be the next European country to protect its savers' money by upping its guarantee threshold. Austrian Vice Chancellor and Finance Minister Wilhelm Molterer claimed that the country's banks are stable, but said such a move would prevent funds flowing to its neighbor Germany. » »

The Austrian government looks set to be the next European country to protect its savers' money by upping its guarantee threshold. Austrian Vice Chancellor and Finance Minister Wilhelm Molterer claimed claimed the country's banks are stable, but said such a move would prevent funds flowing to neighboring Germany.

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UK

British bank-account holders, still reeling after Northern Rock suffered the first UK bank run in more than a century, got some reassurance from the country's government, who upped the guarantee ceiling from around $61,600 to $89,000. The UK is under pressure to raise its guarantee window again. » »

British consumers, still reeling after Northern Rock suffered the first UK bank run in more than a century, got some reassurance from the country's government, which upped the guarantee ceiling from around $61,600 to $89,000. The UK is under pressure to raise its guarantee again.

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France

The French government was also feeling the pressure to match other European bank guarantees, it currently has a maximum compensation limit of 70,000 euros ($95,200). Meanwhile French bank BNP Paribas acted to stem outflows from Fortis and Dexia by buying up the banks' assets. » »

The French government was also feeling the pressure to match other European bank guarantees. It currently has a maximum compensation limit of 70,000 euros ($95,200). Meanwhile, French bank BNP Paribas acted to stem outflows from Fortis and Dexia by buying up the banks' assets.

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Italy

The Italian government called for a more united response and a Europe-wide bailout plan. Italy's Interbank Deposit Protection Fund currently covers 103,291.38 euros ($140,476.28) per depositor.» »

The Italian government called for a more united response and a Europe-wide bailout plan. Italy's Interbank Deposit Protection Fund currently covers 103,291.38 euros ($140,476.28) per depositor.

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Iceland

Iceland's government has been hastily putting together plans to help the country's financial situation and calling on pension funds to repatriate cash as it scrambles for foreign currency. Iceland's banking minister sought to assure investors by saying the plans were "well under way". » » »

Iceland's government has been hastily putting together plans to help the Nordic country's financial situation and calling on pension funds to repatriate cash as it scrambles for foreign currency. Iceland's banking minister sought to assure investors by saying plans were "well under way".

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