Central Bank hunt for deposit scheme partner
THE Central Bank is preparing to appoint a partner to help manage Ireland's deposit guarantee scheme as the UK prepares to leave the EU.
Some elements of the scheme have been managed by a UK firm, but all bank data transferred to a service provider in relation to the scheme must remain in the EU.
Last year, the Central Bank sounded out potential partners. It has now decided to proceed with a full tender for the administering the service in the event of a bank crash.
In the event of a liquidator being appointed to a covered credit institution, the Central Bank is obliged to pay compensation up to €100,000 per person per institution to depositors who are eligible under the rules of the scheme, within specified deadlines.
The covered credit institutions include banks such as AIB, Bank of Ireland, KBC Ireland and Permanent TSB, but also less well known entities such as Depfa Bank.
The Central Bank has told prospective outsourcers that if a bank fails, the successful tenderer will be notified and "required to immediately increase operational capability in line with the size of the failed institution and its deposit base in order to support the required level of service". "In normal circumstances, it is expected that in the run-up to any liquidation decision, the Central Bank will be able to assess the scale of the compensation event and the quality of the data available," it added.
The successful tenderer also has to complete end-to-end stress and simulation tests twice a year.