Dáil Éireann Debate, Wednesday - 17 September 2014
282. Deputy Stephen S. Donnelly asked the Minister for Finance the way the claims by depositors of Berehaven Credit Union will impact upon the Central Bank’s deposit guarantee scheme; which organisations will ultimately bear the cost of honouring the guarantee; if banks generally should be held liable for losses at credit unions; and if he will make a statement on the matter. [34263/14]
View answerI have been informed by the Central Bank that compensation payments were made to members of Berehaven Credit Union from the Deposit Protection Account, DPA, following liquidation of the credit union. This account is operated by the Central Bank and funded by all credit institutions covered by the Deposit Guarantee Scheme, including banks and credit unions. Any sum paid to the Central Bank by the liquidators arising out of the liquidation of Berehaven Credit Union will be credited back to the DPA.
The Deposit Guarantee Scheme was established to ensure that a depositor with a deposit of up to €20,000 was covered where a compensation event occurred in a credit institution. The guaranteed amount was increased in September 2009 from €20,000 to €100,000 per eligible depositor per institution to provide additional reassurance to depositors in Ireland that their savings are safe. The Financial Services (Deposit Guarantee Scheme) Act 2009 confers a legislative imperative on financial institutions, including credit unions, to make a contribution in respect of the DGS.
