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Irish Government-backed Banks

The Irish government has introduced a €400bn scheme to guarantee all savings deposits and debts at six of the country’s major banks until 28 September 2010 in a bid to prevent the lenders from failing like their European institutions amid the financial market turmoil.

This means that deposits in the following Irish banks are now 100% secure:

• Allied Irish Bank
• Anglo Irish Bank
• Bank of Ireland
• Educational BS
• Irish Life and Permanent
• Irish Nationwide BS

British depositors with accounts in UK branches of Allied Irish Bank and Bank of Ireland are automatically covered by the Irish Government's guarantee.

The guarantee also extends to hundreds of thousands of savers in the UK, who hold deposits with the banks’ subsidiaries, including savers with cash in accounts run by the Post Office, which are administered by the Bank of Ireland.

The Irish Minister for Finance also announced that subsidiaries of non-Irish banks (foreign banks operating Ireland) can apply for protection under the Government legislation.

As a result, savers on both sides of the Irish Sea have started to empty accounts of UK banks and put the proceeds into Irish-owned banks. One of the banks to have reported an increase in interest from new customers is Allied Irish Bank, which has £12 billion in UK deposits.

The UK Prime Minister Gordon Brown criticised the Irish move for distorting the market and increasing inflows into Irish banks. In an effort to keep hold of its savers, the British Government raised the level of protection for savings deposits in the UK to £50,000.