Oct. 29 (Bloomberg) -- Kuwait's parliament today voted in favor of a law guaranteeing bank deposits in all local and foreign banks operating in the emirate after the central bank rescued the country's second-largest bank earlier this week.

Lawmakers voted 50 to 7 in favor of the law, which will guarantee the approximately 23 billion dinars ($86 billion) of deposits, said Mohammed al-Saqer, a member of Kuwait's elected Assembly.

Kuwait Central Bank Governor Sheikh Salem al-Sabah said Sunday that Gulf Bank had suffered losses from currency derivatives trading after a decline in the value of the euro versus the dollar. The threat of default prompted the governor to offer protection to Gulf Bank's depositors.

To contact the reporter on this story: Matthew Brown in Dubai at mbrown42@bloomberg.net

Last Updated: October 29, 2008 08:08 EDT