Brian Lenihan Jnr (Dublin West, Fianna Fail)

Deputy Bruton must construe section 2 in the context of the directive, which requires us to implement this legislation. Under the directive, member states are obliged to ensure that coverage shall be at least €50,000 and that by 31 December 2010 all member states are obliged to ensure that the aggregate deposit coverage for each depositor shall be set at €100,000. We intend to implement our obligations immediately rather than to wait until that date. This legislation will stand beyond that date, providing this exact coverage. I am glad the Deputy has given me the opportunity to put that on the record of the House.

However, the Commission is also empowered by the next provision of the directive to prepare a report. If the report concludes that the increase to €100,000 and the harmonisation are inappropriate and not financially viable for all member states, it may bring a fresh proposal on the coverage limits to the Council. Therefore, the Commission is given an option to bring a proposal under the directive. It is envisaged that we in Ireland have made the guarantee and will stand by it. Clearly, there can be evolutions in the light of the Commission proposal.

The answer to the question as to what happens after the date referred to in the Act is that the guarantee will remain in force. Clearly, the Commission may have some ideas about that in the light of the prevailing banking position in Europe.

Deputy Burton asked about the Central Bank of Ireland, which is addressed in section 11. The question of how this issue is addressed in this legislation is distinct from whatever proposals the Government brings forward on the regulatory system. The reference to the Central Bank is a technical issue as to the appropriate place in which the payment out will be made in the event of the guarantee being called. It does not necessarily prejudge any question about the regulatory system which will be decided upon by this House when the Government brings forward legislation on that subject.

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