In light of the recent collapse of several banking giants across the globe, the Irish government has this week announced its plans to introduce with immediate effect a guarantee arrangement to safeguard all deposits made into the Irish Banking System.
Following a consultation with the Central Bank and the Financial Regulator, the government has confirmed that the deposits covered by the safeguard include retail, commercial, institutional and interbank, covered bonds, senior debt and dated subordinated debt (lower tier II), with the following banks:
The government made its decision after taking advice from the governor of the Central Bank and the Financial Regulator about the impact of the recent international market turmoil on the Irish banking system.
The guarantee is being provided at a charge to the institutions concerned and will be subject to specific terms and conditions so that the taxpayers’ interests can be protected. The guarantee will cover all existing aforementioned facilities with these institutions and any new such facilities issued from midnight on September 29, 2008, and will expire at midnight on September 28, 2010.
The decision has been taken by government to remove any uncertainty on the part of counterparties and customers of the six credit institutions. The government’s objective in taking this decisive action is to maintain financial stability for the benefit of depositors and businesses.
The Financial Regulator has advised that all the financial institutions in Ireland will continue to be subject to normal ongoing regulatory requirements.
It is now hoped that the government's initiative will safeguard the Irish financial system and remedy a serious disturbance in the economy caused by the recent turmoil in the international financial markets.
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