MINISTER FOR Finance Brian Lenihan signed the ministerial order last night confirming that the four Irish-owned banks and two building societies were officially covered under the bank guarantee scheme.
Mr Lenihan signed the order guaranteeing AIB, Bank of Ireland, Anglo Irish Bank, Irish Life Permanent, EBS and Irish Nationwide Building Society after receiving "guaranteed acceptance deeds" from the six lenders confirming that they wished to participate in the scheme.
The order covers AIB's subsidiaries in the UK and the Channel Islands, and AIB North America. Bank of Ireland and its subsidiary, ICS Building Society, are also guaranteed.
Anglo Irish Bank said in a statement that its branches in the UK, Jersey, Germany and Austria, and its international division based in the Isle of Man, also fell under the scheme.
The Isle of Man subsidiaries of Bank of Ireland, Irish Life Permanent (ILP) and Irish Nationwide are also covered. Mr Lenihan said in a statement that the guarantee gives "absolute comfort to depositors and investors that they have the full protection of the State".
He said that strict conditions accompanying the guarantee would ensure that "in accordance with prudent banking practice, that risk is properly measured and managed, and the interest of taxpayers are safeguarded".
The Minister said he expected "to make further orders shortly" covering foreign-owned Irish banks eligible to join the scheme. These include the UK-owned Ulster Bank and Halifax Bank of Scotland.
Taoiseach Brian Cowen has denied that the terms of the scheme were changed to remove any obligation on all the protected banks to cover the State for the cost of bailing out one of the banks, should the Government be forced to rescue it.
The Department of Finance said in a "market notice" posted on its website on Wednesday that any banks covered under the guarantee would not have to cover the cost to the State of any bailout of a covered bank, if one bank cannot pay its debts. However, the draft scheme, published on October 15th, says all guaranteed banks would have to cover any State losses incurred if one bank made a claim under the scheme and could not afford to repay the cost.
Speaking in Beijing, which he is visiting on a trade mission, Mr Cowen denied the market notice represented a change in the rules. "No, the State guarantee scheme is the one that's been published by Brian Lenihan, based on the legislation we passed, and our intention is obviously that, should there be any call in relation to any particular situation developing, that the sector would have first responsibility."
A spokesman for the Department of Finance said the market notice "does not contradict the scheme and neither has it has been 'changed'."
Irish Life Permanent was, for the second day in a row, the worst-performing bank stock on the Irish exchange. The share price fell more than 30 per cent amid persistent concerns about the company's exposure to debt issued by Icelandic banks.
