Government guarantee calms fears of savers
THE dramatic intervention to shore up confidence in the financial sector by the Government at the weekend, with a new guarantee for savings of up to €100,000, seems to have eased fears about the health of banks.
The new guarantee for savings is five times the previous limit and will now apply to banks, building societies and, for the first time, credit unions, from last Saturday.
The changes mean that savers with balances of up to €100,000 will be fully compensated by the State if their institution collapses.
The protection scheme covers current accounts, demand deposit accounts, term deposit accounts, share accounts with building societies and share and deposit accounts in credit unions, Finance Minister Brian Lenihan said in a statement at the weekend.
Under the old rules, compensation was only available for 90pc of savings up to a maximum of €20,000 per account.
The new measure means Ireland will have one of the highest levels of guarantee of any country in Europe.
Britain by comparison has set a depositors' guarantee of €48,300, the Netherlands €38,000, Denmark €40,000 and Italy €103,000.
British deposit-takers operating in Ireland, as well as Dutch group RaboBank and Danish-owned National Irish Bank, now find themselves at a competitive disadvantage to Irish regulated banks.
National Irish Bank said yesterday it was in talks with the Financial Regulator about adding to the €40,000 guarantee offered by Denmark to take the protection for its depositors to €100,000 also.
For more information on the new deposit scheme, see www.itsyourmoney.ie