Ireland Extends Deposit Guarantee to Foreign Banks
Ireland said Thursday it is extending its guarantee of bank deposits to cover savings in five foreign-owned institutions.
Finance Minister Brian Lenihan said the guarantee will cover deposits in Irish branches of Northern Ireland's Ulster Bank, British-owned First Active and Halifax Bank of Scotland, Belgium's IIB Bank and Postbank, which is backed by the Irish postal service and the troubled Benelux-based Fortis bank.
Lenihan said the five institutions had "a significant and broad-based footprint in the domestic economy." He said only deposits at the banks' Irish operations would be covered.
"Clearly, there will be some additional limitations and safeguards in relation to these operations to ensure that the support provided relates to liabilities arising from their position within the national economy, rather than to their wider group," Lenihan said.
Lenihan said the plan was in an advanced stage of drafting and will be presented to Ireland's parliament, the Dail Eireann, as quickly as possible.
Last week, Ireland became the first European country to offer a comprehensive bank guarantee, granting taxpayer protection to all deposits and debts of Irish-owned banks.
The sweeping deal committed Ireland to insure unlimited deposits and the interbank debts of six Dublin-based institutions totaling 440 billion euros ($600 billion) for the next two years.