Tuesday, 5 March 2013

Questions (185)

Ciaran Lynch

Question:

185. Deputy Ciarán Lynch asked the Minister for Finance if he will confirm that the unencumbered funds deposited with the Irish Bank Resolution Corporation by a credit union (details supplied) are covered in full by the eligible guarantee scheme; the reason, when in 2011 deposits were transferred to Allied Irish Bank, the funds in question were not transferred; and if he will make a statement on the matter. [11699/13]

View answer

Written answers (Question to Finance)

I am advised by the Central Bank of Ireland that certain tracker bonds sold to Credit Unions which were liabilities of IBRC at the time of the liquidation have a structured deposit element which is covered by the Deposit Guarantee Scheme for that element of the product. As a result the first €100,000 of any claim from these depositors is covered under the DGS Scheme. I have been advised that the Liquidator is aware of a number of depositors who fall outside the eligibility criteria for the ELG Scheme due to the nature of the investment product. Unfortunately, if a deposit is not eligible under the ELG scheme the depositor will rank as an unsecured creditor in the liquidation. At the time that this product was purchased by Credit Unions, there was no additional guarantee provided by the State. It was always the case that the ELG scheme covered only those liabilities which were entered into during the issuance window.

Pursuant to a Transfer Order made by the High Court under CISA on 24 February 2011, Anglo Irish Bank transferred the vast majority of its Irish and UK customer deposits to Allied Irish Banks, together with its NAMA senior bonds and its Isle of Man subsidiary. I have been informed by the Special Liquidators that as far as they are aware all deposits as set out in the Transfer Order were transferred by IBRC. The credit union bond was not transferred to AIB because tracker bonds were specifically excluded from the transfer.