ELG Could End in 2013

In October  the Deputy Governor of the Central Bank of Ireland hinted that the bank guarantees could end soon . He said  “.. in my view we are getting close to the position where the changing circumstances arising from successful implementation of the IMF/EU programme and the introduction of the banking union should permit the full removal of the government guarantee. “
The guarantee he was talking about is the  Eligible Liabilities Guarantee . This is a state backed  guarantee that covers most  deposits in Irish banks over €100,000.   It was introduced on December 9th 2009 and it’s full name is the “ Credit Institutions (Eligible Liabilities Guarantee) ” (ELG for short ) .  It has been renewed every 6 months and the ELG is currently in place until the end of 2012 .

(The “Deposit Guarantee Scheme”  is a seperate one that covers  retail deposits up to €100,000 . This  State guarantee continues .)

It is likely that the ELG will be withdrawn from January 2013 on instant access deposits and those accounts with short notice periods.  The first €100,00 of any such deposits will still be covered by the Deposit Guarantee Scheme – but anything over €100,000 will not be covered.

The withdrawal of the ELG on longer fixed term deposits will probably be more complicated – but it is likely that most fixed term deposits over €100,000 set up before the end of 2012 will be covered until maturity. New fixed term deposits over €100,000 will probably not be covered after Jan 2013.

UPDATE -  Nov 24  2013 The ELG will be extended to Dec 2013 – but it is likely that individual banks or types of accounts will be withdrawn from it during 2013.

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