The Minister for Finance has published the Financial Services (Deposit Guarantee Scheme) Bill 2009. The Bill provides for updating of the Irish deposit guarantee scheme currently regulated under the European Communities (Deposit Guarantee Scheme) Regulations 1995 (as amended). The 1995 Regulations gave effect to the deposit guarantee provisions contained in Directive 94/19/EC

The new legislation follows the Government announcement on deposit guarantees of 20 September 2008 and provides for:

  • an increase in the statutory limit for the deposit guarantee scheme for banks and building societies from EUR20,000 to EUR100,000 per eligible deposit or per institution with effect from 20 September 2008
  • the discontinuance of the co-insurance requirement whereby the depositor bore 10 per cent of the loss up to the statutory ceiling on cover
  • extension of the deposit guarantee scheme to credit union savers.  

While the provisions overlap with provisions recently announced at European level in connection with Directive 94/19/EC, the specific changes announced by the Government in September 2008 require the enactment of primary legislation. This primary legislation if and when enacted will be accompanied by a complementary statutory instrument.

The provisions contained in the Bill are separate to the provisions contained in the Credit Institutions (Financial Support) Scheme 2008. This Scheme applies to the 7 specified covered credit institutions. The proposed deposit guarantee scheme legislation applies to all credit institutions authorised in the State and will include credit unions which did not previously benefit from statutory deposit protection.