European Commissioner for the Internal Market, Michel Barnier, announced three more steps, designed to protect consumers and business from financial turmoil. The steps include; an investor compensation schemes, to provide compensation when an insurance firm is unable to return investor’s assets; an insurance compensation scheme, to protect against an insurance company failing and a deposit guarantee scheme, a safety net for bank account holders.

Barnier said the aim of the steps was to restore and consolidate confidence in the financial system. He added that the measures should be seen in the context of a longer term strategy, that he was “building brick by brick”.

The steps were meant to harmonize existing legislation and schemes. As an example, there were, he said, 40 different deposit guarantee schemes, but the new scheme would protect deposits up to €100,000 per person, per bank. Non European currencies would also be covered.

Should a citizen, or business, need to call on the deposit protection, they could expect a payout within one week, not the three months that is the current limit. He also stressed that a payout should be automatic.

The investor compensation scheme was not intended to protect investments, per se, as it was natural for investors to accept risk. The Commissioner said, “we’re not offsetting risk, but we are protecting against fraud, negligence and incompetence”. He added that he felt that the measures were needed now as the risk was “not hypothetical”, and that the EU “shouldn’t wait for another Madoff case”.

He said that he would be announcing initiatives on derivatives and short selling in September and assured that “week after week, I will implement the G20 agenda”, saying that he is consulting widely and is prepared to “listen and adapt”, but he warned that, “we don’t want to falter”.