Irish bank move upsets British bankers
British bankers are upset over an emergency move by the Irish government to guarantee 100% of all Irish deposits. As a result, Brits have been pouring money into Irish accounts. Stephen Beard reports.
Shuffling through British pounds (Julian Herbert/Getty Images)
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TEXT OF STORY
Renita Jablonski: The chairman of the Eurozone's finance minister said today the U.S. must adopt the rescue plan to help keep global markets in check. And meantime, British bankers are attacking a move by the Irish government to protect bank depositors. European Correspondent Stephen Beard continues our coverage of the financial crisis with that story.
Stephen Beard: The Irish government announced the emergency measure on Monday night, guaranteeing 100 percent of all Irish bank deposits. But British bank customers have only $100,000 of deposit protection, so they've now been pulling their cash out and plowing it into an Irish account.
Fund manager Justin Urquart-Stewart says in the current climate of fear, ordinary retail deposits have become hot money:
Justin Urquart-Stewart: Yes, you're turning people into hot money traders to seek the best possible defense. And what this means is that we're seeing a rather . . . disjointed action in terms of supporting banks, which is exactly was not what was required.
British bankers say Ireland's 100 percent guarantee is destabilizing and illegal. They claim it amounts to unfair state aid for Irish banks.
In London, this is Stephen Beard for Marketplace.
Comments
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From New York, NY, 10/02/2008
Why is it unfair? Are the Irish supposed to just let other countries drag them down with them?
This is simply survival of the fittest. Good job by Ireland.
From Pittsburgh, PA, 10/01/2008
You are wrong...British bank customers are NOT guaranteed to $100,000. They are only guaranteed to £35,000. At current exchange rates, that is only about $63,000.
John
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