Cyprus Losses Spur EU Lawmakers to Bolster Depositor Protection

The European Parliament will seek greater protection for depositors of crisis-hit banks in the wake of the Cyprus bailout as it weighs changes to proposals aimed at taking taxpayers off the hook for future rescues.

Lawmakers are planning to amend a draft European Union law on bank failures so that deposits would only be written down after losses have been imposed on other unsecured senior debt, according to Gunnar Hoekmark, the legislator leading the assembly’s work on the plans. The measure would apply to deposits greater than 100,000 euros ($130,900), as those below this threshold already benefit from government guarantees.