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Government decision gets mixed response
10/10/2008
A decision by the government to extend its deposit guarantee scheme to include a number of foreign-owned banks which have branches in Ireland has been questioned by an expert.
Now, Ulster Bank, First Active, Halifax Bank of Scotland, IIB Bank and Postbank, which are owned by companies which operate outside the republic, can now all apply to be included in the scheme.
The Credit Institutions Protection Bill 2008 guarantees all deposits in banks up to €400 billion.
Finance Minister Brian Lenihan said that measures would be put in place to guarantee that the plan would support the Irish economy rather than the banks and their parent companies.
But, ESRI chief economist John Fitzgerald has claimed he does not see that the government could realistically stop the banks from using the guarantee to borrow money and then use it to recapitalise their head offices.
The recent financial turmoil has seen 12 financial institutions either taken over, nationalised or collapse.
Contact us for legal advice
Now, Ulster Bank, First Active, Halifax Bank of Scotland, IIB Bank and Postbank, which are owned by companies which operate outside the republic, can now all apply to be included in the scheme.
The Credit Institutions Protection Bill 2008 guarantees all deposits in banks up to €400 billion.
Finance Minister Brian Lenihan said that measures would be put in place to guarantee that the plan would support the Irish economy rather than the banks and their parent companies.
But, ESRI chief economist John Fitzgerald has claimed he does not see that the government could realistically stop the banks from using the guarantee to borrow money and then use it to recapitalise their head offices.
The recent financial turmoil has seen 12 financial institutions either taken over, nationalised or collapse.
Contact us for legal advice
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