(LUXEMBOURG) - EU ministers were looking at ramping up bank deposit protection to 100,000 euros and aligning their guns against the global financial forestorm for the first time, at a crisis meeting here on Tuesday.

Finance ministers from the 27 European Union countries issued a statement that come what may, they would support banks and the savers with money deposited in them.

A five-fold increase in minimum guarantees, to avert any run on banks, was on the agenda in what would be the first EU-wide concerted action after a series of national domino steps to protect savers.

The figure on the table was for a minimum guarantee of up to 100,000 euros (136,000 dollars).

In a joint declaration, they pledged to protect the stability of the financial system with "liquidity support through central banks, action to deal with individual banks or enhanced depositor protection schemes."

Irish Finance Minister Brian Lenihan, confirming that a 100,000-euro limit was "under examination", declared as the talks began: "We must restore confidence at a European level to the banking system."

A coordinated European response to the crisis has been slow in coming despite the leaders of Britain, France, Germany and Italy meeting over the weekend, with Berlin opposing a proposal to create a European-wide bank rescue fund.

In the absence of EU-wide action, a growing number of European countries have rushed to raise their minimum guarantee on bank deposits in hope of boosting confidence.

Currently EU law requires member states to guarantee savers' deposits to at least 20,000 euros in case a bank goes bust, although some states have long offered much higher protection.

After Germany offered a blanket guarantee on bank deposits on Sunday, Austria, Britain, Denmark, France, Portugal, Spain and Sweden indicated they had similar plans in the works.

Ireland triggered the rush last week with a law offering an unlimited guarantee on all deposits at its biggest banks.

However, Ireland has come under fire from its EU partners for the move because it covers not only individual savers' deposits but a wide range of liabilities held by the country's six biggest banks.

The scope of the blanket guarantee has irritated other EU countries, which fear that it will give Irish banks an unfair advantage over their European rivals.

It also raised concerns that it could encourage people to flock to Ireland to park cash in Irish accounts, causing deposits to flow out of banks elsewhere in Europe.

"One country's solution is the other country's problem. We really have to push for a common solution," said Swedish Finance Minister Anders Borg.

Economists at investment bank UBS raised doubts over such ambitious guarantee schemes.

"The guarantee is not credible per se: if a run on bank was to happen the governments would not be able to fully guarantee the deposits," they said in a research note.

"The guarantee will be efficient only to the extent that it is self-fulfilling: because there is a state guarantee, there is no reason for a run on bank," they added.

Likewise, analyst Nicolas Veron at Brussels-based economics think-tank Bruegel warned that raising deposit guarantees would only have limited benefits.

"Importantly, deposit insurance is good headline material because it relates to ordinary people's experience, but it's a bit of a sideshow from a capital markets point of view," he said.

"Don't expect decisions on deposit insurance alone to fix the current credit crisis," he said.

Despite a growing sense of urgency to improve oversight of the financial sector, finance ministers failed to agree a separate long-planned shake-up of how the insurance sector is regulated, an official said.

The reform has floundered on differences over how to organise oversight of the sector and the role of group supervisors and their power over subsidiaries in foreign EU countries.

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