Richard Bruton (Dublin North Central, Fine Gael)
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Question 125: To ask the Minister for Finance the meetings, either at ministerial level or at official level, within the EU regarding a move to increase the level of deposit savings protected in the event of failure of a financial institution; and if Ministers have set a deadline for the taking of proposals on the matter. [24594/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, the EU has been considering possible enhancements to the EU Deposit Guarantee Directive, arising from Ecofin Council meetings in October and December 2007 in the wake of the dislocation in the global financial markets. The review arises in the context of the Ecofin Roadmaps, agreed then, on 'Strengthening EU arrangements for financial stability' and 'Actions taken in response to the financial turmoil'. The Deputy should be aware that, while the level of deposit protection is being looked at as one part of the review, the review is broader in spectrum and focuses on wider policy areas such as improving the speed of payouts, depositor information, and cross-border interoperability.

This review is ongoing and Ireland is participating in all discussions at Ministerial level and official level. Most recently at Ministerial level, I attended an orientation discussion among Ecofin Ministers on Deposit Guarantee Schemes on 3 June 2008. Under the aforementioned Roadmap, the European Commission has been requested to prepare a report on the Deposit Guarantee Schemes in the EU and it is expected that Ecofin Council will have a strategic discussion on the findings of this report in Autumn 2008.

My Department has been participating in discussions on Deposit Guarantee Schemes at the Economic and Financial Committee (EFC) and at the Financial Services Committee (FSC). Indeed, the European Commission report will be discussed by my officials and other Member State officials at these Committees over the coming months with a view to presenting Ministers with a finalised report in the Autumn. While there is no formal deadline for a conclusion to these discussions, I would expect that clear conclusions will begin to emerge towards the end of 2008.

I might reiterate that the first and most robust line of defence for depositors is a well-managed system of prudential regulation and supervision so as to minimise the risk that a Deposit Guarantee Scheme (DGS) might need to be activated. Recent assessments by reputable international bodies such as the IMF and the OECD have confirmed that the Irish system of financial regulation complies with best international practice. I might also add that Irish banks are well capitalised, liquid and profitable, with strong asset quality and no material exposure to sub-prime securitisations, and are thus well placed to cope with the uncertainty currently prevailing at the international level.