Anglo Irish Bank

Berty

I have recieved today a letter explaining the situation and I would lke to point this part out.

Anglo Irish Bank ceased to be a member of the UK Scheme on 28 November 2008

I believe that on the 28 they left the uk scheme and I think that maybe in 2010 they will not return to to uk scheme but with their own scheme. If I am right does not a bank have to inform you when they leave the uk scheme which is what they have done?

Also the letter had

your deposit is protected by the irish scheme and is further guaranteed by the irish government under the credit instituions (financial support act) 2008 which was announced on the 29 september 2008.

So your money is protected yet if in 2010 the limit of protection drops under the uk limit there is nothing saying you would be covered by the uk scheme.
However they may increase their limit of protection in 2010 to meet the uk to continue to market their accounts to uk savers.

This is just my guess as I'm no expert but thats how I read into it.

MarkFromCornwall

masonic wrote: »

That's correct. If the Irish compensation limit drops below £50k, then FSCS protection will once again apply for the sum between the Irish compensation limit and £50k.

But the more important question is, supposing (unlikely I know) that the Irish scheme failed to pay out (in an Iceland-like situation), would the FSCS pay out instead. They might, but as far as I can see, they are not under any obligation to do so.

masonic

MarkFromMullion wrote: »

But the more important question is, supposing (unlikely I know) that the Irish scheme failed to pay out (in an Iceland-like situation), would the FSCS pay out instead. They might, but as far as I can see, they are not under any obligation to do so.

That's right, if the Irish scheme failed, it would take the Government to step in and guarantee any deposits for any compensation to be paid from the UK. However, Ireland could also be supported by the European Central Bank if it got into difficulties.

soulsaver

Berty wrote: »

...So your money is protected yet if in 2010 the limit of protection drops under the uk limit there is nothing saying you would be covered by the uk scheme.
.

The Irish Govt 100% guarantee applying to their 'big 6' banks ends in 2010. The Depositor Protection Scheme (equiv of our FSCS) covers up to 100k euros, in line with most of EU core economies, will continue to apply after 2010 - so protection will drop from 100% to 100k euros, not to zero.
It exceeds UK current arrangement, and if it continues to, by EU LAW savings in UK branches will still be guaranteed by the Irish Depositor scheme.
And BTW, if it drops below UK FSCS scheme limits it would officially be 'passported' - compensation for the element below UK levels being claimed from the Irish scheme, the balance from UK FSCS.
These compensation arrangements aren't decided by the banks - they are EU regulations, to ensure depositors get the maximum compensation.

MacBiggles

AIB, 70% nationalised, supported by the UK RoI, IoM and EEA compensation schemes and offering a useful rate of interest. Worth a (now obsolete term) punt perhaps?

gozomark

I presume you mean Allied Irish, and not Anglo Irish (the bank this thread is about)

In fact same answer either way - yes. However, there is no UK or EEA compensation schemes applicable, and only IoM if you save offshore, up to the limits (from memory 50,000 for single, 100,000 joint), then Irish guarantee above that. If onshore you are depending on the Irish 100% guarantee for all.

MacBiggles

Yes, I must avoid those acronyms. I was referring to Anglo Irish, but doesn't the RoI scheme cover kick in on the IoM too?

samizdat

The Irish government guarantee does cover the Isle of Man but the guarantee runs out on September 28th 2010. On the other hand, since Anglo Irish is now government-owned, savings in Anglo Irish are guaranteed for so long as the company remains in government ownership.

It remains to be seen what the government guarantee is worth. I have looked long and hard at the Anglo Irish Isle of Man accounts because they are very competitive for short-term deposits but, for myself, I have decided I am not prepared to risk losing my capital for the sake of maybe up to 1% gross return above competitor rates. I would want more upside for taking this risk. This is especially true because the accounts in question are fixed-term deposits, committed for 3 or 6 months, and in that time the World can change quite fast.

gozomark

MacBiggles wrote: »

doesn't the RoI scheme cover kick in on the IoM too?

only for sums in excess of the limits

ps Anglo Irish is 100% state owned, not 70%

asbokid

gozomark wrote: »

only for sums in excess of the limits

ps Anglo Irish is 100% state owned, not 70%

All the dodgy loans issued by the Anglo Irish when Sean FitzPatrick was chairman are now under the stewardship of the Irish Finance Ministry through its National Asset Management Agency.

With the Irish economy officially the most bankrupt in Europe, the bank's loans are now in mass default. Provision for bad debt has added more than 8% to the national debt, and there is more bad news on the cards.

The Anglo's former chairman, FitzPatrick resigned in a cloud of controversy after it emerged that he had been, erm, borrowing money from the Anglo-Irish himself.

FitzPatrick made the silly mistake of forgetting to leave IOU notes in the kitty jar after drawing on the bank's reserves. An important lesson to everyone, there.. It's all too easy to forget when the sums borrowed are triflingly small (around €30m).

Yesterday, the Anglo-Irish received emergency funding of €4bn from the Irish government. Further emergency injections of up to €7bn are expected.

Other recipients of the taxpayer bailouts include the Bank of Ireland (which manages accounts for the British Post Office) and the Allied Irish.

Irish_Times wrote:

State gives €4bn to Anglo but bank may need €3.5bn more
Irish Times
Saturday, May 30, 2009

ARTHUR BEESLEY and LAURA SLATTERY

ANGLO IRISH Bank has said it may require additional capital of up to €3.5 billion from the Government to help it bear the cost of a sharp escalation in bad loans even after it receives the €4 billion promised yesterday by Minister for Finance Brian Lenihan.

Support of that scale would bring the total Government cost of recapitalising Anglo, Allied Irish Banks (AIB) and Bank of Ireland (BoI) to €14.5 billion. AIB and BoI have already received €3.5 billion from the State. Mr Lenihan believes BoI will not require more capital when its loans move to the National Asset Management Agency (Nama), but has not made any findings in respect of AIB.

Anglo, whose affairs are under Garda and regulatory investigation, incurred a pretax loss of €4.1 billion in the six months to March as the value of land and development assets plummeted. While taking a €4.1 billion impairment charge, Anglo said that the level of “past due” and “impaired” loans rose to €23.6 billion in March from €2.5 billion in September.........

In full at...


http://www.irishtimes.com/newspaper/finance/2009/0530/1224247748453.html