All institutions covered by guarantee will help pay debts of any insolvent bank

THE Government will still recoup payments from all institutions covered in the bank guarantee scheme should the guarantee be called upon and payments not retrieved from the particular institution involved.

Confusion over the use of the word “indemnity” resulted in reports saying the scheme had been watered down and the Government had dropped an insistence that the industry as a whole help to pay the costs involved in settling the debts of any insolvent bank.

The Department of Finance said the covered institutions have provided an indemnity or an obligation to reimburse for any loss incurred in connection with any payments made under the guarantee.