On Friday, 24th October 2008 The Minister for Finance Brian Lenihan has signed an order confirming the six main Irish owned banks will be covered by the State’s deposit guarantee scheme.
Irish Banks: AIB, Anglo Irish Bank, Bank of Ireland, EBS Building Society, Irish Life & Permanentand Irish Nationwide are the banks designated by Minister for Finance for inclusion in this arrangement. Outside banks: Ulster Bank, First Active, Halifax Bank of Scotland, IIB Bank and Postbank will be included in the guarantee.
Under the terms of the arrangement, if any institution defaults, the Minister for Finance ‘will pay to the relevant creditor, on demand, an amount equal to the unpaid covered liabilities’.
The institutions concerned will pay a quarterly charge to the Exchequer in return for the guarantee. The scheme will last until September 2010.
Minister Lenihan stated that the conditions accompanying the guarantee under the Scheme ‘will ensure that balance sheet growth is measured and in accordance with prudent banking practice, that risk is properly measured and managed and the interest of taxpayers are safeguarded’.
The Minister went on to say he expects to make further orders shortly for the other banks eligible to avail of the Scheme.
A growing list of countries have been affected by the global financial crisis. These include: Iceland, Hungary, Pakistan, Ukraine, Serbia and Belarus which are all in discussions with the International Monetary Fund (IMF). Capital has also flowed out of countries such as South Africa, South Korea and Argentina which yesterday announced it was nationalising its pension funds.