BBA outrage over Irish deposit guarantee

BBA outrage over Irish deposit guarantee


The British Banking Association has expressed outrage over the Irish Government’s resolution to guarantee 100% of all deposits in the Republic’s six major banks. The decision has prompted many customers to transfer savings held in British banks to their Irish counterparts.  

While the flurry of transfers is great news for the Irish economy, it may spell disaster for the already jittery English bankers. The BBA have threatened immediate action to establish whether the Irish guarantee will violate EU competition laws. In addition to this the BBA have issued a word of warning to all financial institutions to double check the rules regarding competitive banking laws.


Irish Prime Minister, Brian Cowen has defended Ireland’s right to do what is necessary to maintain the stability of their economy. He has stated that the plan was “absolutely necessary” to regain consumer confidence.


In an interview with the Financial Times, the Finance Minister, Brian Lenihan, said “We believed we had to take firm, decisive action to show that Ireland was open for business and would remain open for business.


“In the absence of a European approach, a small sovereign state like Ireland is obliged to ensure the stability of the banks that are orphaned with us.”


Although Ireland’s decision has ruffled European feathers, the move will inevitably incite other countries to follow suit by issuing similar guarantees to customers.


In the UK Gordon Brown has vowed to up the limit on saving guarantees to £50,000, but as yet the move has not been made official and is currently still under review.


By Danielle Williams

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