Written answers

Tuesday, 1 December 2009

Department of Finance

Financial Institutions Support Scheme

12:00 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Question 119: To ask the Minister for Finance the position regarding the bank guarantee; if Irish deposit accounts will be guaranteed beyond the two years originally announced by him; if the establishment of the National Asset Management Agency is intended to allow the cessation of the bank guarantee in September 2010; and if there will be a continuation of this guarantee beyond this date. [44329/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

As the Deputy is aware, yesterday I published the draft Credit Institutions (Eligible Liabilities Guarantee) Scheme or ELG Scheme, and I intend to bring this Scheme, which has received EU State aid approval, before the Houses of the Oireachtas on 3 December next.

Term deposits with a term of up to five years will be covered by the ELG Scheme, regardless of the nature of the depositor or the nature of the deposit, provided that they are incurred between the period from the commencement date of the ELG Scheme up to and including 29 September 2010, subject to the approval of the EU Commission at six monthly intervals.

The ELG Scheme is intended to facilitate the ability of credit institutions in Ireland to issue debt securities and take term deposits with a maturity post-September 2010 of up to five years, on either a guaranteed or unguaranteed basis. No provision has been made to allow the participating institutions to incur guaranteed liabilities or to accept guaranteed deposits after 29 September 2010. Demand deposits will remain guaranteed until 29 September 2010 subject to the approval of the EU Commission at six-monthly intervals.

As the Deputy may be aware, the €100,000 limit under the existing Deposit Protection Scheme still applies. It is important to note that the €100,000 deposit guarantee is not subject to review and does not expire on 29 September 2010. All deposits of less than €100,000 are fully guaranteed under the Deposit Protection Scheme and are not impacted in any way by the CIFS Scheme or the ELG Scheme.

In relation to any link between the establishment of the National Asset Management Agency (NAMA) and the bank guarantee, these are among the suite of measures which have been introduced to stabilise the financial system and in their totality will result in a reformed, reinvigorated and stable banking system which can meet the needs of the economy.


No comments

Log in or join to post a public comment.