EU's trillion-euro bank bail-outs are "over" as "Bail-in" goes into effect

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A new eurozone wide insolvency fund, the Single Resolution Mechanism, will also become operational on January 1. It will build up contributions from the banking industry over the next eight years to use in cases of financial collapse.

Europe's banks have been required to beef up their capital buffers and comply with tough new regulations in the wake of the financial crisis.

The European Central Bank has also assumed direct supervisory responsibility for 129 "systemically" important lenders in a bid to create a fully-fledged banking union in the currency bloc.

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But analysts have warned Brussels' tentative steps towards banking union remain incomplete and could cause more uncertainty for ordinary depositors after January 1.

"Taking 8pc losses from creditors has never been tested in reality", said Nicolas Veron, of think-tank Bruegel.

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The problem of failing banks continues to plague a number of southern eurozone states. Portugal's new left-leaning government has already split over providing another €2.2bn taxpayer injection into struggling lender, Banif.