Brendan Griffin
Question:69. Deputy Brendan Griffin asked the Minister for Finance if he will verify the assertions made in an article (details supplied); and if he will make a statement on the matter. [35969/13]
View answerThursday, 18 July 2013
Questions (69)
Written answers
I am advised by the Central Bank of Ireland that certain tracker bonds sold to a number of credit unions which were liabilities of Irish Bank Resolution Corporation (IBRC) at the time of the liquidation have a structured deposit element which is covered by the Deposit Guarantee Scheme (DGS) for that element of the product. As a result the first €100,000 of any claim in such cases is covered under the DGS. The bond itself is not covered by the ELG scheme as it predates that scheme. Credit unions and others affected have been advised to deal with the Special Liquidator in relation to this matter.
On the issue of why these bonds did not transfer out of the bank, I understand that tracker bonds were specifically excluded from the Transfer Order due to the complex nature of those products which contain a variety of derivative elements. As part of their regulatory requirements, credit unions are required to maintain realised reserves for the purpose of absorbing unexpected losses, including from unguaranteed losses. This should be the first line of defence in such circumstances.