t is expected that details regarding the proposed merger of Irish Nationwide Building Society and Anglo Irish Bank, which are to be wound down, will form a major strand of the legislation, with the Government announcing a plan to transfer the deposits of Irish Nationwide Building Society to Anglo Irish Bank.
This deposit book will then be sold off to other financial institutions, most likely AIB and Bank of Ireland.
Anglo Irish Bank and Irish Nationwide are due to submit a joint restructuring plan to the European Commission by the end of January, outlining how both institutions are to be wound down over time.
The impact of the possible transfer of Irish Nationwide’s deposits to Anglo Irish Bank on the employees of the building society is unclear.
Lenihan also said the government would speed up the winding down of nationalized lenders Anglo Irish Bank ANGIB.UL and Irish Nationwide IRNBS.UL.
"We are going to have to accelerate the phasing out of Anglo Irish Bank and Irish Nationwide very early in the new year."
There was “a very strong logic” in merging the post-Nama rumps of Anglo and Irish Nationwide, he added.
Moving their deposits was “clearly a challenge” but he was hopeful of retaining them all if moved to “another institution of sufficient quality and repute” with the backing of the Government guarantee.
Probably unlikely but I would like to see my Anglo Deposits moved to An Post investment services.
What guarantee - if any - is there that accounts moved from Anglo and INBS will carry the same terms and conditions, especially interest rates?.
Very unlikely.
None for variable rate products.
AIB and BOI will either
(1) force Anglo and INBS depositors to move to their products or
(2) will try and seperate the Anglo and INBS deposits.
Many of the depositors left in Anglo and INBS are rate chasers who do not care a lot about safety. If AIB or BOI take a step wrong with the transition there will be further deposit flights.
But why might consumers be FORCED into something - and who is going to protect consumer interests when Anglo & INBS are wound up?
Anglo/Nationwide deposit books will be auctioned; this may seem like an attractive option for the desperately deposit hungry Irish banks but TUPE19 (Transfer of Undertakings and Protection of Employment) will likely apply meaning the buyer will have a large headache on their hands of having to employ all of the origination staff with the service. The only way to fix that problem is for the banks to rapidly shed staff but they have been unwilling to do this in large numbers to date. Banks are going to push clients toward automated transactions (online/phone/atm based) and use charges to punish branch users as a means to funnel more people away from the branches in conjunction with the closures.