Irish government guarantee bank deposits

Here's an email I sent today to AIB (IoM). I'll post the reply when it comes:



Dear Mr Quaggan

I recently opened a Privilege 12 month Fixed Interest euro account with Anglo Irish IoM (nr. 123/45678/901; EUR XXK at 5.25%) and was comforted to see today on your website your message concerning the Irish Government guarantee that states:
“The guarantee will cover all existing aforementioned facilities with Irish institutions including Anglo Irish Bank Corporation plc and all related deposit taking subsidiaries (including Anglo Irish Bank Corporation (I.O.M) plc). The guarantee is for a two year period until 28th September 2010.”

That being the case, I am considering opening a second Privilege 12 month Fixed Interest account with you, this one in pounds Sterling for the sum of circa GBP XXK

But before I do so I would be grateful for:
1) your confirmation that both accounts will be covered by this guarantee to their full value
2) your clarification that this overrides (and/or supplements) the existing Isle of Man protection scheme currently limited to GBP 15K.

A reply by email is, at the moment, sufficient; but before opening the second account I might require written confirmation in a signed letter.

Yours faithfully

shellbell63 wrote: »

If they are..... my ears are well & truely pricked!

If you live in the UK don't get too excited, because Anglo Irish (IOM) don't allow UK residents and domiciles to have accounts, and Anglo Irish (Ireland) don't allow non-residents to have accounts (unlike many other Irish banks). That means you have to use Anglo-Irish (UK), who only do accounts in sterling.

gozomark wrote: »

sorry, but Irish taxpayers are funding it - the banks are paying an unspecified insurance premium (ie the charge), but its the Irish taxpayers who are underwriting the insurance policy

What is that guarantee worth? Ireland is in a very poor economic condition and the taxpayer could ill-afford a bailout of a major bank, or two..

Tax revenues have slumped in Ireland. Last week, it was the first of the 15 nations in the eurozone to declare itself officially in recession. Ireland's once vaunted property and construction industries are now dead on their feet.

The hi-tech American companies which settled in Ireland back in the 90s, lured by the generous tax code, will be contemplating their position now the credit-driven consumer spending bubble has finally burst.

The FT reports Tuesday:

ft.com wrote:

Ireland's banks suffered their biggest one-day share price fall for two decades yesterday as fears swept the Dublin market about their ability to withstand the downturn in the Irish economy amid the global financial turmoil.The benchmark ISEQ index closed 13 per cent lower, extending its loss this year to 52.5 per cent - the biggest decline in 2008 by a leading European bourse.

Anglo Irish Bank, the specialist property lender, lost 45 per cent, while Irish Life & Permanent, the bancassurer and the republic's largest mortgage provider, fell 34 per cent.

Allied Irish Banks shed nearly 16 per cent and Bank of Ireland lost 15 per cent.

Eamonn Hughes, banks analyst with Goodbody stockbrokers, said: "Everyone has been spooked . . . investors have turned their guns on the next country which is seen to have issues to deal with and that is Ireland." [....]

With money markets frozen, Irish banks are seen as particularly dependent on interbank funding to finance loan expansion, which is seen to make them vulnerable.

Sebastian Orsi, an analyst at Merrion stockbrokers, pointed out that loan to deposit ratios in Ireland are about 150 per cent, compared with 130 per cent in the EU.

Mr Orsi said that in current market conditions one concern was that some banks might hit liquidity problems as they found it hard to refinance term loans that come due in the next few months. [...]

received the following email from Anglo Irish IOM, in reply to my question as to whether they were covered

"The Irish Government has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II), with certain Irish banks. This covers all deposits with Anglo Irish Bank and also includes the Isle of Man subsidiary."