THE GOVERNMENT has decided to increase the statutory limit for the deposit guarantee scheme for banks and building societies from €20,000 to €100,000 per depositor.

The cover will apply to 100 per cent of each individual's deposit. This guarantee level will also apply to credit union savers.

Announcing the decision at the weekend, Minister for Finance Brian Lenihan said he wanted it to be known "that the Government is confident about the strength and resilience of the Irish financial system.

"The Government is committed to the stability of our financial system, so that money placed with an Irish credit institution would not be at risk. The Irish Government wants to protect the whole financial system, secure its stability and ensure that all deposits in Irish banks are safe."

Mr Lenihan said the Central Bank and Financial Regulator have stressed the soundness and stability of the Irish financial system.

"This measure provides additional reassurance to depositors in Ireland that their savings are safe.

"The new guarantee level is now among the highest in the EU," the Minister said.

Mr Lenihan also commented that notwithstanding the uncertainty caused by the turbulence in international financial markets last week, it is encouraging that the banks have retained the confidence of their customers.

The increased guarantee limit had been under consideration for some time, and Mr Lenihan said he believed the weekend was the appropriate time to make the announcement.

The move was welcomed by the chief executive of the Irish League of Credit Unions (ILCU), Kieron Brennan.

While welcoming the Minister's intervention, Mr Brennan confirmed that the ILCU's own Savings Protection Scheme, covering its 521 member credit unions, now stands at over €110 million.