Saturday, September 15, 2007

Northern Rock - Irish Govt intervention?

Northern Rock depositors in the Republic are covered by the UK’s Financial Services Compensation Scheme (FSCS).

However, compensation under the FSCS scheme is limited: 100% for the first £2,000 in savings and 90% for the next £33,000.

On savings above £35,000 you get nothing.


In other words, the FSCS pays out a maximum of £31,700 per person. Yet we’re told that the average Northern Rock deposit in the Republic is €100k, which is approximately double the amount covered by the FSCS.

In those circumstances, should Finance Minister Brian Cowen be offering such reassurance to Irish depositors?

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