# What will happen to irish bank deposits if ireland defaults?



## Gatekeeper (6 Apr 2011)

Hi, am just wondering what will happen to Irish Deposits if Ireland defaults which is looking increasingly likely? Have just had a call from Permanent TSB who say they are likely to stay in business and yet according to various newspaper reports etc the only banks likely to remain in Ireland in the near future are Allied Irish Bank and Bank of Ireland.  Also presumably money invested in Post Office Bonds and Certificiates would be affected by this also?  Are the English banks safer and if so which ones and how does one go about investing money with them? Presumably Ulster Bank is an English bank and so would this also be a safer option for deposits?


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## Lightning (6 Apr 2011)

If Ireland defaults the money may not be found for depositors. However, if Ireland defaults via a planned debt restructure, that some people say will happen in 2013, then depositors may not be effected. 

An Post State Savings are most risky in a default situation as they are invested directly in the Irish national debt. 

UK Banks generally have a UK guarantee, the market rates the UK are more likely to be able to may back its debt.


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## Gatekeeper (7 Apr 2011)

Many thanks Ciaran for that.  Quess the post office is the least safe place to have your savings at the mo. Hard to know what to do.  Buy a big safe, insulate it and bury it in the back garden!!


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## Godfather (7 Apr 2011)

Oh My God! I've some money in italian post bonds!!!


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## frankmac (8 Apr 2011)

As a matter of interest (pardon the pun), why is 2013 being mentioned as the likely time for a default? And does this mean that my An Post savings bonds, which mature in June 2012, should be ok?


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## Lightning (8 Apr 2011)

frankmac said:


> As a matter of interest (pardon the pun), why is 2013 being mentioned as the likely time for a default? And does this mean that my An Post savings bonds, which mature in June 2012, should be ok?



2013 is speculation but well researched speculation. 

I have read a lot about the prospect of an Irish default/debt restructure and a multitude of publications including The Economist magazine have said that it is likely to happen in 2013.

It may happen sooner, it may happen later, it may, however unlikely, never happen.


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## frankmac (9 Apr 2011)

CiaranT said:


> 2013 is speculation but well researched speculation.
> 
> I have read a lot about the prospect of an Irish default/debt restructure and a multitude of publications including The Economist magazine have said that it is likely to happen in 2013.
> 
> It may happen sooner, it may happen later, it may, however unlikely, never happen.


 
Thanks Ciaran. Can you give me your view on the second part of my question?


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## Chris (11 Apr 2011)

frankmac said:


> As a matter of interest (pardon the pun), why is 2013 being mentioned as the likely time for a default? And does this mean that my An Post savings bonds, which mature in June 2012, should be ok?



One reason for 2013 as a specific year is that the EU and ECB are planning to introduce a new "bailout system", for want of a better word, where bond holders will automatically share the burden.
Secondly, come 2013, the majority of debt will have been loaded onto the state at that stage allowing for a better picture of the effects of such a heavy debt load on bond yields, ECB interest hikes, and CDS rates. 
If the 2013 year were set in stone, then I would say that your An Post savings would be relatively safe. But I am not sure whether Ireland will be able to last as long as 2013 without defaulting.


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## frankmac (11 Apr 2011)

Thanks for that Chris. Think I'll take it out in June this year. Then probably scratch my head wondering where to put it.


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