Brian Lenihan Jnr (Dublin West, Fianna Fail)

Maintenance of the overall stability of the Irish financial system is a central priority of the Government. Since August 2007 the international financial system has been affected by unprecedented turmoil and dislocation. Credit markets, which are pivotal to meeting the medium-term funding needs of the financial system, have effectively closed since August 2007. Interbank lending rates for shorter maturities have increased significantly, raising the cost of finance to financial institutions. Difficulties created by impairments of sub-prime securities have adversely impacted on the European and US financial systems, as demonstrated by recent developments in the US. This has led to major uncertainty for the global financial system.

The prompt actions by international central banks, including the European Central Bank, to provide major injections of liquidity have contributed to greater stability in financial markets internationally, although they continue to remain subject to significant uncertainties. Agreement on the extensive and far-reaching plans announced recently by the US authorities should help to stabilise financial markets and rebuild confidence in the international financial system. Ireland, as a small, highly open economy with a significant financial sector closely integrated into the international financial system, cannot be immune from these developments. Therefore, the Government has been very active in supporting public confidence in the safety of deposits and the stability of the financial system overall. I welcome Deputy Bruton's support for my announcement on 20 September that the Government had decided to increase the statutory limit for the deposits guarantee scheme for banks and building societies from €20,000 to €100,000 per depositor per institution and that the cover will apply to 100% of each individual's deposit up to the €100,000 limit. This guarantee level, which will also apply to credit union savers, is now among the highest in the EU.

As I stated at the time, the Government is committed to the stability of our financial system, so that money placed with an Irish credit institution would not be at risk. The Irish Government wants to protect the whole financial system and secure its stability. As far as meetings with the parties referred to in the Deputy's question are concerned, this is a normal part of my role as Minister for Finance, given my responsibilities for the financial sector.

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