Commission approves revised Irish guarantee scheme for banks
23 November 2009
The revised guarantee scheme excludes subordinated debt and extends to instruments with a maturity of up to five years. Kroes stressed that it will give credit institutions in Ireland access to medium-term state-guaranteed financing.
The Commission has approved an Irish measure aimed at stabilising financial markets by providing guarantees on deposits and debt to eligible banks active on the Irish market. The Commission found the revised scheme, originally approved on 13 October 2008 to be in line with its Guidance Communication on state aid to overcome the financial crisis. In particular, the measure as amended is limited in time and scope.
Commissioner Kroes said: "The new guarantee scheme will give credit institutions in Ireland access to medium-term state-guaranteed financing and provide Ireland with an effective means of restoring confidence in the financial markets, while at the same time limiting distortions of competition ".
Ireland notified a revised guarantee scheme which aims at further stabilising financial markets by ensuring financial institutions' access to financing. It introduces substantial modifications.
First, the material scope of the scheme has changed. The new guarantee excludes subordinated debt and extends to instruments with a maturity of up to five years. Previously, liabilities were covered until 29 September 2010 maximum.
Secondly, the temporal scope of the scheme has been modified. The instruments guaranteed under the scheme may be issued from 1 December 2009 until 1 June 2010.
Finally, the new scheme aligns the guarantee fee to the remuneration structure set out in the Commission Guidance Communication on state aid to overcome the financial crisis.
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