The beginning of the end for an extraordinary period in Irish banking history was further advanced today with the announcement that the bank guarantee scheme will end on March 28th.
For most consumers who may need their memories jogged a little, the bank guarantee scheme and the deposit guarantee scheme are not the same.
The bank guarantee scheme was brought into force in September 2008 to prevent the collapse of the Irish banking system. Under the scheme, the Irish State guaranteed €73 billion in banking liabilities from AIB Group – including EBS, Bank of Ireland Group and Permanent TSB Group.
The Deposit Guarantee Scheme on the other hand is whereby individual customer savings up to a maximum of €100,000 is protected. This will remain in force after the bank guarantee scheme ends on March 28th.
Minister for Finance, Mr. Michael Noonan stated that today’s development was part of exiting the EU-IMF bailout as it would help Ireland’s cost of borrowing.
It’s ironic that on the day the Irish Government announced its banking plans, development in Italy have presented a situation that could severely hamper wider Eurozone banking recovery caused by its inconclusive election results. Over the course of the last 2 years, various ECB initiatives to provide greater levels of funding across the Eurozone have been met with restrictive lending at national level. Europe desperately requires stability and time to recover. The Italian election results have the potential to create a new fever that the Euro area does not need and cannot afford.