Irish banks received a boost this week with the extension of the short term Government guarantee for short term bank liabilities, including corporate and interbank deposits as well as debt securities.
On Wednesday last the Minister for Finance, Brian Lenihan, announced that the Government guarantee would be extended from its current expiry date of 29 September 29 to December 31.
The State guarantee is deemed an important support for the Irish banking system facilitating access to short- and longer-term funding.
The modification to the guarantee was recommended by the Governor of the Central Bank, the Financial Regulator, and the National Treasury and Management Agency. An approval by the European Commission under the State aid rules needs to be secured before the guarantee can officially be extended.
“I am very grateful for the assistance of the European Commission for its open engagement and co-operation on this important issue for Ireland and look forward to continued strong co-operation in resolving this and other significant issues for the Irish banking system in the coming weeks,” Minister Lenihan said.
The Minister reiterated that the announcement does not affect retail deposits of up to €100,000 which continue to be guaranteed under the ordinary Deposit Guarantee Scheme which is not time limited.
