The ELG scheme ended at midnight on 28th March 2013. The institutions covered by the ELG are:
- AIB – including previous Anglo Irish Bank deposits that were moved to AIB on 1 July 2011
- Bank of Ireland
- EBS Limited (EBS became a subsidiary of AIB on 1 July 2011)
- ICS Building Society
- Irish Life and Permanent – including Irish Nationwide Building Society deposits that were moved to Irish Life and Permanent on 1 July 2011
The ending of the ELG scheme removes a costly distortion in the wider deposit market in Ireland and should improve conditions for the normal flow of credit in the economy. Depositors will have the same protection as all other depositors across Europe. Their deposits will continue to be guaranteed by the Deposit Guarantee Scheme [DGS] which covers the first €100,000 per depositor per institution, or €200,000 in the case of a joint account.
The vast majority of customers will not be impacted by this decision and in practice; this means that almost 98% of bank account holders, whose deposits fall below the €100,000 threshold, remain covered by guarantee -irrespective of any change to the ELG Scheme. The ending of the ELG will have no impact on Credit Union members’ savings with their local Credit Union.
The ELG has already been removed in the UK and as a result, about €12 billion equivalent in previously eligible deposits have come off guarantee with no effect on deposit volumes there.
It is important to note that liabilities incurred after January 2010 and before midnight on the 28 March 2013 will continue to be guaranteed until their next maturity, subject to a maximum term of 5 years.
Rating agencies, Moody’s and Fitch have both commented positively on the removal of the ELG. The ELG was paid for by the covered banks and in total, the Irish Government has received Guarantee fees to the end of December, 2012, of some €3.8 billion which represents a significant drag on the banking system.