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It is likely that the ELG will be withdrawn from January 2013 on instant access deposits and those accounts with short notice periods.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Nov 24 2013 The ELG will be extended to Dec 2013 – but it is likely that individual banks or types of accounts will be withdrawn from it during 2013.