Kevin McConnell, an analyst for Bloxham Stockbrokers in the UK , said yesterday that the Irish Republic was now the safest place in Europe for global depositors to store funds.
Savers on both sides of the Irish Sea started to empty accounts of UK banks and put the proceeds into Irish-owned banks in the wake of the controversial proposal by Ireland yesterday to guarantee all deposits.
Allied Irish, Bank of Ireland and Anglo Irish bank are covered by the guarantee and all have branches in the UK. BOI covers the UK Post Office banking also – which now comes under the guarantee.
So it looks like the Brian Cowen and co. may have a lot more deposits to guarantee than they first thought they had.
UK banks are not happy – and Ireland was accused of making matters worse for non-Irish banks, with corporate treasurers and large savers pulling money out and putting it into the safer haven of Irish banks.
“If this is legal, then I’m a banana,” one disappointed senior British banker said, arguing that the Irish guarantee amounted to unfair state aid.