Noel Harrington (Cork South West, Fine Gael)
Link to this: Individually | In context

Question 109: To ask the Minister for Finance the guarantees available to a depositor of an Irish bank on deposits of up to €100,000; if this is guaranteed in the event of a default of any bank to bondholders; and if he will make a statement on the matter. [23589/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The legal basis for the Deposit Guarantee Scheme in Ireland is set out in the European Communities (Deposit Guarantee Scheme) Regulations 1995 (S.I. No. 168 of 1995) as amended. These Regulations implement the European Union Directive on Deposit Guarantee Schemes (Directive 94/19/EC) as amended. Under the Regulations, a depositor with a deposit of up to €100,000 will be covered by the Deposit Guarantee Scheme where a compensation event occurs in a credit institution. A compensation event occurs if-

(a) the Central Bank of Ireland has determined that, for the time being, the credit institution appears to be unable, for reasons directly related to its financial circumstances, to repay a deposit or deposits and to have no current prospect of being able to do so,

(b) a court has appointed a liquidator or examiner of the credit institution, or

(c) a judicial authority has made, for reasons directly related to the credit institution's financial circumstances, any other ruling that has the effect of suspending depositors' ability to make claims against it.

The Scheme covers 100% of deposits held in any credit institution authorised in Ireland (including credit unions) up to a maximum of €100,000 per qualifying depositor per institution and is administered by the Central Bank of Ireland. Generally, the Scheme covers deposits held in current accounts, demand deposit accounts and term deposit accounts with credit institutions.

The basic intention behind such a scheme is to reassure depositors that there is a safety net that will enable them to recover all, or at least most, of their savings in the event of a failure of a credit institution. This reassurance, in turn, helps to contribute to the stability of the financial system. For more information on the various guarantees available to depositors for amounts above €100,000, please see: http://www.itsyourmoney.ie/index.jsp?n=757&p=125