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Eu-member or in this case EEA member and your banks can operate everywhere. meanwhile they are still regulated and deposit-insured by their national states.
As Iceland demonstrates, that is a bad rule.
and up to a point Ireland shows, is a problem.
No depositors have so far been in danger in Ireland - only bondholders who should lose their shirts.
And once you have opened for savers out of other EU-countries, they are as senior as your domestic savers and you have to treat both the same way.
No, they really shouldn't.
The British depositors can still petition their own government for restitution. Since the British government is more likely to cover British depositors than Icelandic depositors, the Icelandic government is justified in giving domestic depositors preferential treatment.
Management and bondholders should, of course, lose their shirts no matter their nationality.
Friends come and go. Enemies accumulate.
The Directive imposes a minimum guarantee of 20,000 per depositor; moves to increase this minimum to 50,000 or even higher had been agreed politically before the Icelandic crisis, but had not been incorporated into EU law, much less into EEA law. The Tryggingarsjóður guarantees 1.7 million krónur on the basis of a fixed euro-króna exchange rate, equivalent to 20,887. The Netherlands and the UK have higher guarantee levels, 100,000 and £50,000 (approx. 60,000) respectively; Landsbanki was a member of the Dutch and British compensation schemes for the purposes of guaranteeing this difference in cover, an arrangement known in Britain as the "passport system", and commonly used by banks throughout the EEA. In addition, the UK Treasury has exceptionally guaranteed retail deposits in excess of £50,000 which were held in Icelandic-owned banks in the UK at the time of the crisis, at a cost of some £1.4 billion (1.7bn).
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