The European Commission has approved the Government’s application to extend the guarantee scheme for short-term bank liabilities.
The guarantee includes corporate and interbank deposits as well as debt securities.
It had been due to expire on September 29th, and has now been extended until the end of this year.
Such liabilities were not covered by the European Commission’s decision in June to extend other strands of the guarantee scheme until the end of the year.
Subordinated debt – the type of funding investors lend to banks for a risk premium – will not be covered after September 29th.
The extension had been recommended by the Governor of the Central Bank, the Financial Regulator and the NTMA.
Minister for Finance Brian Lenihan today welcomed the approval. He said the scheme will help the flow of credit to Irish businesses.
“The supply of credit is essential to protect and support the creation of jobs,” the Minister said.
Announcing the Government’s decision to seek approval for the extension extend the guarantee earlier this month, Mr Lenihan said it followed recommendations from the Central Bank, the Financial Regulator and the National Treasury Management Agency.