Irish government guarantee bank deposits

hendiman

gozomark wrote: »

bear in mind the first part is "only" guaranteed by IOM not by Irish Govt

I think you have highlighted one potential aspect that is still uncertain and will remain so. As I understand it the IOM Depositor Compensation Scheme (DCS) compensates up to £50,000 for individuals on a net basis. Extracts from the FCS IOM website confirm that:

This compensation is paid out of levies collected from other deposit takers in the Isle of Man, from sums that are loaned to the DCS by the Isle of Man Government and from any other sums that may be borrowed by the Scheme Manager for this purpose. However, the legislation does not specify when compensation will be paid but the Scheme Manager will pay the full entitlement or part of the entitlement as soon as possible.

The timing of payments may depend upon the size of the bank which fails. The payment period will also vary according to when liquidation proceeds are collected from the failed bank and how much is recovered. There is no "standing fund" of compensation (i.e. money is not collected before a bank failure).

I also understand that currently the maximum levy that can be initiated for each participanting bank is £500,000 per annum. If Anglo Irish Bank International Plc in IOM became insolvent (and assuming Anglo Irish Bank Corporation Plc was unable or unwilling to honour its guarantee) then it appears likely that it would take a considerable period of time for depositors to be fully compensated. It seems more likely that part compensation perhaps over a number of years would instead be provided even with DCS having access potentially to funding/loans from IOM government.

Note - that this DCS amount would not be covered by comparable schemes in the UK, Ireland or elsewhere.