Irish government guarantees banks
Irish government guarantees banks
Tuesday 30th September 2008
The Irish government is to guarantee the savings of depositors at the nation's top six banks.Following the rescue bids for Fortis in Europe and Bradford & Bingley in the UK, the Irish state is moving to protect its savers and prevent a run on any institution.
The backing lasts until September 2010 and covers Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society.
Saving bonds as well as savings accounts will be covered.
A statement from the Taoiseach explained the move was made to limit the impact of the international market turmoil on the Irish banking system.
"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," a statement read.
"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."
UK savers with accounts at Irish banks Bank of Ireland and Anglo Irish Bank have their deposits protected through the Financial Services Compensation Scheme (FSCS), if either was to become the next victim of the credit crisis.
In response to the government move to cover deposits, share prices of the biggest Irish banks leapt in early trading in Dublin
Anglo Irish Bank gained 41 per cent, Allied Irish Banks was up 20 per cent, and Bank of Ireland rose 19 per cent.
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