# Government Guarantee to be extended but phased out



## Lightning (27 Sep 2012)

The ELG, the 'government guarantee' expires on 31 December 2012. 

An EC/NTMA/Irish Government decision to extend the ELG has, in the past, often been made at the last minute. 

According to The Independent, the government may not extend the ELG when it expires. If true, this would leave deposits, in Irish banks protected up to 100,000 EUR per person per bank but no deposit protection above 100,000 EUR.



> FOUR years after the bank guarantee scheme was introduced as a panic response to the collapse of Lehman Brothers, the Government is looking at proposals to end the controversial bank scheme before it runs out in December, the Irish Independent has learned.
> 
> The Department of Finance has set up an inter-agency working group to discuss a roadmap for scrapping the scheme at some stage, and officials are now looking closely at ending the scheme much more quickly than previously thought.
> 
> ...


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## Lightning (21 Oct 2012)

According to The Sunday Times, there will be a gradual removal of the ELG. 


From 1 January 2013, deposits with notice periods 30 days or under (including instant access deposits) may not be covered by the ELG.
From 1 January 2013, deposits/term deposits with notice periods over 30 may continue to be covered by the ELG.
Deposit rates with notice periods 30 days or under (including instant access deposits) could go up from 1 January 2013 as banks seek to compensate customers for the removal of the deposit guarantee. 

BoI are looking for a faster removal of the ELG.


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## Lightning (21 Oct 2012)

BoI paid 370,000,000 EUR in fees to the Irish government in fees for the ELG this year. They want to reduce this huge fee.


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## Lightning (21 Oct 2012)

Probably not in a significant way. 

BoI and AIB have already got away with removing the ELG from their UK deposit base without much fuss and no talk of deposit runs. 

Deposits under 100,000 EUR will still be protected. 

Deposits with a maturity date over 30 days will still be protected. 

I would guess that the banks will lose a small minority of deposits as a consequence of phasing out the ELG.


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## mercman (21 Oct 2012)

CiaranT said:


> BoI paid 370,000,000 EUR in fees to the Irish government in fees for the ELG this year.



Ciaran, does anybody really care how much it cost the BoI. As a form of recollection, the Irish Banks have blamed everybody for their own mistakes.


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## Lightning (21 Oct 2012)

mercman said:


> Ciaran, does anybody really care how much it cost the BoI.



The viability of the Irish banks is in everyone's interest or we will be paying for further recapitalisations.


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## mercman (21 Oct 2012)

CiaranT said:


> The viability of the Irish banks is in everyone's interest or we will be paying for further recapitalisations.



Understood, but we're going to pay anyway, regardless of what Joe Public says or does. As with most European populus, it really is every man for himself. I do really realise that unless and until some Bankers are taken to task, the return of the Black economy will generate vast wads of cash that will not enter the banking regime, which in turn has even more serious effects to the Tax take of the country.


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## Lightning (2 Nov 2012)

*Bank of Ireland "ready" for the end of the deposit guarantee.*

http://www.irishexaminer.com/busine...t-hike-in-mortgage-interest-rates-212742.html



> Meanwhile, Mr Boucher said the bank is "prepared and ready" to exit the ELG bank guarantee scheme, which is due to expire at the end of the year.


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## Lightning (7 Nov 2012)

*The Department Of Finance expects the banks to leave the government guarantee scheme in the early part of next year.*

[broken link removed]



> The Department Of Finance expects the banks to leave the government guarantee scheme in the early part of next year.
> 
> Mr Moran told the committee "We would see considerable stability in deposits in Ireland over the past few months, including during period of extreme stress in Europ, spain. We have been doing a lot of work on removing the bank guarantee in the early part of next year. So as next step forward would like to see removal of guarantee early next year".


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## Lightning (18 Nov 2012)

Wilbur Ross has told the Sunday Business Post that 31 December 2012 is the time to end the government guarantee. 

It is now very clear that BoI want the unlimited deposit guarantee to end. It is less clear if AIB and PTSB are on the same page.


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## Lightning (21 Nov 2012)

The government will extend the guarantee until 31 December 2013. However, it will be phased out. The phasing out is like to be on a deposit product type by product type basis.

*Indo: Government to phase out bank guarantee early next year.*

http://www.independent.ie/business/...t-bank-guarantee-early-next-year-3301707.html



> THE Government expects to phase out its bank guarantee in the first quarter of next year, the Department of Finance said this morning.
> 
> It is “safer” to seek approval from the European Commission to extend the guarantee beyond the end of this year, Department of Finance secretary general John Moran said.
> 
> ...



Linda Yueh:  *Legislation Next Week to Extend until 31 December 2013*: 



> Ireland gov to introduce legislation next week to give technical approval to extend banking guarantee by further 12 months:Finance Ministry


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## Number14 (29 Nov 2012)

*ELG extended*

Looks like ELG entended to end of 2013 as indicated - http://www.finance.gov.ie/viewdoc.asp?DocID=7444


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## Lightning (29 Nov 2012)

A lot more work to do. 

(1) Legislation. In progress. 
(2) EC need to approve extension. Yet to be happen.
(3) NTMA/banks need to decide on implementation applicabilities. Yet to be happen.


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## 3CC (29 Nov 2012)

Bank guarantee scheme extended until June 2013

29/11/2012 - 13:50:59
The controversial bank guarantee scheme has been extended for another six months.

The extension, until June of 2013, means it will cover the banks until after next year's stress tests.

Fianna Fáil, who introduced the guarantee four years ago, today supported its extension.

Labour and Fine Gael also backed it, while Sinn Féin opposed it. 

from 
http://www.breakingnews.ie/ireland/bank-guarantee-scheme-extended-until-june-2013-576042.html


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## Lightning (29 Nov 2012)

Poor/unclear reporting at Breakingnews.ie, we have only passed the Irish legislative hurdle. 

The guarantee cannot be extended until the EC approves it, banks apply for it and the NTMA & banks reach an agreement how to the phase out of the scheme. 

BoI say they don't want the guarantee anymore and may not apply for it. AIB want it phased out. There is more talking ahead.


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## Lightning (3 Dec 2012)

Some soft of wind down of the government deposit guarantee seems to be in the works. 

From [broken link removed]



> Minister of State for Finance Brian Hayes said it was the Government’s ambition to “exit the guarantee next year and, hopefully, that will happen”. *Early indications were that they could exit the eligible liabilities guarantee scheme “in the first quarter of 2013*”, and that would be “another example of weaning the banks off taxpayers’ money”.



and



> Fianna Fáil public expenditure spokesman Seán Fleming said the scheme would be extended only for new deposits made next year, while existing deposits were guaranteed until they matured. He noted that the Department of Finance did not build the scheme into its medium-term fiscal projections.



Is Seán Fleming saying that an extension for non-term deposits only is on the cards?


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## Lightning (5 Dec 2012)

[broken link removed]


Expects that the EC will approve the government request for an extension beyond 31 December 2012.
 Phased out from Q1 2013.


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## Lightning (6 Dec 2012)

The government have now applied to the EC for an extension. 
EC are likely to grant extension until 30 June 2013. 
"Main banks to be moved out of the scheme in March 2013"


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## Lightning (16 Dec 2012)

Latest from the FT:


The EC have now approved the extension of the guarantee until June 2013. 
Bank of Ireland are highly frustrated that the government guarantee is being extended. 
Bank of Ireland say they require permission to get out of the guarantee. 
The guarantee may be wound down from early 2013. 
The government are concerned that banks, other than BoI, will not be able to raise funds without the guarantee. 

2 of 3 steps done, legislative approval until 31 December 2013 and EC approval until 30 June 2013. The last step is for the NTMA to implement the extension with the banks, according to the NTMA website, that has not yet happened.


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## Lightning (20 Dec 2012)

Just 4 banking business days until the expiry of the government guarantee.

According to the NTMA website, not one bank has yet agreed formally to an extension beyond 31 December 2012. Once again, it is been left until the very last minute. I wonder are BoI dragging their heals?


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## Gatekeeper (20 Dec 2012)

*Bank guarantee schemes*

Hi All,

Any one know if there is any up date on the gov guarantee scheme or the E.L.G. and when they may be extended to?


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## dub_nerd (21 Dec 2012)

Extended to 30-Jun-2013.


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## Lightning (21 Dec 2012)

Yeah, the NTMA website today confirms that the scheme has been extended until 30 June 2013. There is no mention of the scheme been wound down on 31 March 2013. 

I will update the best buys.


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