Finian McGrath (Dublin North Central, Independent)
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Question 271: To ask the Minister for Finance if he will support a matter (details supplied). [30779/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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On 20 September 2008, I announced that the Government had decided to increase the compensation limit for the Deposit Guarantee Scheme in Ireland from E20,000 to E100,000 per depositor per institution. The cover applies to 100% of each individual's aggregate deposits up to the prescribed limit per financial institution and also applies to deposits held in credit unions. The Financial Services (Deposit Guarantee Scheme) Act 2009 provided a statutory basis for the making of subsequent regulations (European Communities (Deposit Guarantee Scheme) Regulations 2009) in order to give legal effect to this decision on deposit guarantee arrangements. The Deposit Guarantee Scheme applies to all credit institutions authorised in this State.

In addition there is a further guarantee called the Credit Institutions Financial Support Scheme which applies to the seven covered credit institutions (AIB, Anglo Irish Bank, Bank of Ireland, Irish Life & Permanent, Postbank, Irish Nationwide, and EBS). As you are aware, the Scheme provides a State guarantee for all deposits and certain liabilities of the guaranteed institutions to the extent that these are not covered by existing deposit protection schemes in the State or any other jurisdiction. In short, depositors must first claim from the Deposit Guarantee Scheme and then move on to claim any balance from the Credit Institutions Financial Support Scheme.

The Credit Institutions Financial Support (CIFS) Scheme was put in place for a two year period from 30 September 2008 to 29 September 2010. However, as I announced in my Supplementary Budget Statement on 7 April 2009, it is the Government's intention to put a State guarantee in place for the future issuance of debt securities with a maximum maturity of up to five years. The enactment of the Financial Measures (Miscellaneous Provisions) Act on 26 June 2009 has provided a power to extend the guarantee by order beyond its current expiry date of 29 September 2010. In this regard, work is continuing on the drafting of a Scheme, the introduction of which requires EU State aid and Oireachtas approval. Access to longer-term funding in line with the mainstream approach in the EU is expected to contribute significantly to supporting the funding needs of the banks and to securing their continued stability. The extended scheme must be approved in accordance with EU State aid rules and discussions are continuing in this regard with the European Commission.