Jim Daly (Cork South West, Fine Gael)
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Question 48: To ask the Minister for Finance if the bank guarantee scheme will remain the same and if deposit accounts containing up to €100,000 will be safe; the length of time the guarantee will remain in place; and if he will make a statement on the matter. [29008/11]

Michael Noonan (Limerick City, Fine Gael)
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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. As a statutory scheme implemented under EU law, the Deposit Guarantee Scheme is in place on an ongoing basis. The Scheme is administered by the Central Bank of Ireland and 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 in accordance with the terms of the Directive. 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. While a review of the EU Directive is underway at present, this is not expected to have any impact on the coverage level already in place. Furthermore, on foot of a recent Government decision I have sought EU state aid approval for a prolongation of the Eligible Liabilities Guarantee (ELG) Scheme that guarantees, inter alia, retail deposits in excess of €100,000 and all other deposits, on the advice of the Governor of the Central Bank and of the other State authorities, on financial stability grounds. I have also consulted with the ECB.

The extension of the ELG Scheme is a necessary element in placing the Irish banking system on a sound footing and is also important in maintaining the confidence of deposit holders. Subject to receipt of EU state aid approvals, I propose to place a draft statutory instrument before both Houses of the Oireachtas for approval well in advance of the end of the year to enable the issuance period in the Scheme to be extended for one year to 31 December 2012.