The outer reach of state obligations under deposit guarantee schemes – What can we learn from the Icesave case?

Abstract:

On 28 January 2013, the EFTA Court passed a judgment in the so called Icesave case, regarding Iceland’s rules on the protection of savers’ deposits following the collapse of all its major banks in the autumn of 2008. In the opinion of the EFTA Surveillance Authority (ESA), this constituted a breach of the EU Directive on deposit-guarantee schemes.

The EFTA Court, however, found that Iceland had not failed to comply with the obligations of the Directive. Moreover, the judgment indicates serious shortcomings in the EU regulations regarding protection of depositors.

In this analysis, the authors shed light on the background of the case and on the basis for the EFTA Court´s reasoning.