Government Deposit Guarantee Expires in 8 Weeks

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Lightning

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The Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009 (the ELG Scheme) expires in around 8 weeks on June 30th 2011.

The last time the 'Government Guarantee' was coming close to expiry date, Brian Lenihan extended it within 24 hours of the expiry of the guarantee on September 30th 2010. In the days preceding, the late nature of the extension, helped cause the huge 'second wave' of the Irish bank deposit flight as corporates took fright and pulled considerable amounts out of Irish banks.

Will Noonan act faster this time? Will he exclude Anglo/INBS and their remaining deposits, and the likely winding down PTSB, from the guarantee this time? or does it really matter anymore ?
 
CiaranT said:
Will Noonan act faster this time? Will he exclude Anglo/INBS and their remaining deposits, and the likely winding down PTSB, from the guarantee this time? or does it really matter anymore ?
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Does not really matter,according to Morgan Kelly who reckons our final debt will be about €250 billion,we are talking of a Government debt that is more than €120,000 per worker, or 60 per cent larger than GNP.

Default is utterly inevitable at this stage,its probably best to get it over with,our Eurpoean brethren gave us one hell of a kicking when we were down on the ground.
 
Given that depositors currently rank equally with senior bondholders under Irish Legislation it would preferable for changes to be introduced to differentiate between the two in the event of default.
 
Anyone care to guess what they will do...will the renew the guarantee for depositors? :eek:
 
Government applies for bank extension
The Government has applied to the European Commission an extension of its bank guarantee scheme for deposits over €100,000, according to a Government source.
Under national law the so-called Eligible Liabilities Guarantee (ELG) remains in place until the end of the year, but EU approval only extends until the end of June.
The Government's application is to extend EU approval until the end of 2011.
Meanwhile, the IMF has approved €1.58bn in new assistance to Ireland.

A Department of Finance spokesman said the loan was the next disbursement due for Ireland under the EU-IMF programme.

http://www.rte.ie/news/2011/0516/eu.html
 
Interesting, we will see if the EC is quicker approving this extension that an last one.
 
The EU have authorised the Irish government to extend the bank guarantee again.

WSJ: EU Commission Authorizes Bank Aid Extension For Ireland

[broken link removed]

The European Commission has authorised, under EU state aid rules, a six month prolongation of guarantees schemes for credit institutions in Ireland and Spain, it said Wednesday.

The extended measures, which will now run until December 31 2011, are "well targeted, proportionate and limited in time and scope," the commission said.

During the application of the crisis rules for State aid to banks, the Commission has been authorising guarantee schemes on banks' liabilities for periods of six months in order to be able to monitor developments and adjust conditions accordingly.

The number of guarantee and liquidity schemes has gone from 16 at the end of 2010 to nine in the first half of 2011. The use of State guarantees has also decreased, as the financial situation improved somewhat, banks are being restructured and the conditions of the guarantees themselves were tightened in July 2010, it said.

- By Frances Robinson, Dow Jones Newswires; +32 2 741 1486; frances.robinson@dowjones.com
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Next step, the Irish government has to enact the extension.
 
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