Govt guarantees all deposits in leading Irish banks

The Government has announced a guarantee arrangement to safeguard all deposits with Ireland’s main banks for the next two years following yesterday's turmoil on the stock markets across the world.

The guarantee will cover all deposits with Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society.

It may also include specific subsidiaries that may be approved by the Government following consultation with the Central Bank and the Financial Regulator.

In a statement this morning, the Government said it made the decision following 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, which will expire at midnight on September 28, 2010, is being provided at a charge to the institutions concerned and will be subject to specific terms and conditions so that the taxpayers' interest can be protected.

“The decision has been taken by Government to remove any uncertainty on the part of customers of the six credit institutions,” a spokesman for the Department of Finance added.

“The Government’s objective in taking this decisive action is to maintain financial stability for the benefit of depositors and businesses and is in the best interests of the Irish economy.”

“This very important initiative by the Government is designed to safeguard the Irish financial system and to remedy a serious disturbance in the economy caused by the recent turmoil in the international financial markets.”