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Update on Government Bank Guarantee and Anglo Irish Bank
The Irish Government has announced that it intends to split the now nationalised Anglo Irish Bank into a funding bank, which will hold €54 billion in deposits and funding, and an asset recovery bank, which will take €38 billion in loans not being sold to the National Asset Management Agency. It has been speculated that this may even be done by the end of the year. Whether or not the foundations of the proposed split will have to be based in legislation is not yet clear.
In other banking developments, the Minister for Finance has extended the Government’s ‘Bank Guarantee Scheme’ (the “Scheme”) which has applied to Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, EBS, Irish Nationwide and Postbank together with certain named subsidiaries since October 2009. Pursuant to the Scheme, the Government had guaranteed short term bank liabilities, including corporate and interbank deposits as well as debt securities. The Scheme, which was originally due to expire on 29 September 2010, has now been extended to 31 December 2010. You can find more detailed information on the nature of the Scheme on our website at the following link.