Cessation of the Eligible Liabilities Bank Guarantee Scheme

Yesterday the Irish Government announced the cessation of the Eligible Liabilities Guarantee (ELG) Scheme, effective from 28th March 2013. The full text of Michael Noonan’s announcement can be found here.

The controversial scheme was introduced in September 2008 in response to share price collapses in Irish banks. The scheme essentially covered all deposits in participating Irish banks, without limit.

What does this mean for Depositors?

There are currently two guarantee schemes in operation. The ELG scheme outlined above will now cease on 28th March next.

The Deposit Protection Scheme (DPS) remains in place, and covers eligible depositors for up to €100,000 per person per institution, or €200,000 for a joint account. A list of the participating institutions can be found at the links below.

Fixed term deposits which were covered by the ELG will remain covered until their maturity date, regardless of amount. Thereafter, depositors will need to look to the €100,000 limit (€200,000 for a joint account) to ensure they are fully covered.

Deposits in excess of these amounts would not be covered in the event of default by the deposit taker.

What action do I need to take?

As stated above, fixed term deposits which were previously covered by the ELG remain covered, and no action is needed.

If your funds are in excess of the €100,000 (or the €200,000 joint account limit), you may need to look to moving these funds to more than one deposit taker to ensure you remain covered in full.

Importantly, fixed term deposits made between now and the 28th March 2013 will remain covered by the ELG for the duration of the term (to a maximum of 5 years), irrespective of the closure of the scheme on 28th March next.

Need more information?

This may well be an opportune time to review your deposits to ensure they are covered and that you are getting a competitive rate of interest. This is especially relevant if your funds will exceed the DPS limits above.

Please call us on 01 497 2133 or email Ella Gleeson at egleeson@cfsireland.com if you have any questions at all.

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27th February 2013

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