Direction Order in relation to Anglo Irish Bank and Irish Nationwide Building Society under the Credit Institutions (Stabilisation) Act 2010
Following an application by the Minister for Finance earlier today, the High Court has issued two Direction Orders in relation to Anglo Irish Bank Corporation Limited (Anglo) and Irish Nationwide Building Society (INBS) under Part 2 of the Credit Institutions (Stabilisation) Act 2010.
The Minister, having consulted with the Governor of the Central Bank of Ireland, was of the opinion that these Direction Orders were necessary to achieve one or more purposes of the Credit Institutions (Stabilisation) Act 2010 and to ensure that both institutions are in a position to commence the process for their restructuring in accordance with the provisions of the EU/IMF Programme of Financial Support for Ireland.
That Programme, which endorsed the Government’s approach, provides for a significant change to the banking system including a specific plan for the restructuring of both Anglo and INBS in a way that will protect depositors, seeks to minimise capital losses arising from the work out of these credit institutions and strengthens the overall banking system. In line with this commitment, a plan for the restructuring of Anglo and INBS was submitted to the European Commission on 31 January 2011 in accordance with EU State aid rules.
The Direction Orders enable the State to commence the process of restructuring Anglo and INBS as envisaged in their restructuring plan in a manner that benefits from necessary legal protections and is recognised in other EU Member States.
In that regard the Direction Orders provide for the following main provisions:-
The NTMA will commence an auction process for the sale of the deposits and assets, in accordance with EU State aid requirements, which is expected to be completed as quickly as possible. No action is required to be taken by depositors following the making of the direction orders by the High Court. The position of depositors in both Anglo and INBS remains fully secure. Customers of Anglo Irish Bank and Irish Nationwide should be reassured that their deposits remain protected and can be accessed as normal. The transfer will have no impact on existing terms and conditions. Depositors will continue to have full access to their funds during and after the auction process. It is expected that the actual transfer of deposits will conclude as quickly as possible and customers will be kept fully informed by Anglo or INBS as appropriate.
The position of employees in the business areas of the two institutions that will be affected by the transfer of deposits and assets will be safeguarded as appropriate in accordance with applicable employment legislation, with regard to the objective of affecting a swift transfer of the deposits and assets at the end of the auction process.
8 February 2011
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