Bank guarantee scheme to end

Minister for Finance Michael Noonan: said 'significant progress' had been made in addressing Ireland's banking problems.

Minister for Finance Michael Noonan: said 'significant progress' had been made in addressing Ireland's banking problems.

Tue, Feb 26, 2013, 00:00

Minister for Finance Michael Noonan has  announced the Eligible Liabilities Guarantees Scheme (ELG)  is to end.

The scheme will be closed on March 28th.

There had been growing expectations that the scheme, which was put in place in December 2009 to protect deposits in Irish covered banks, was set to be phased out, given the improving position of Irish banks.

"The Irish banking system failed the Irish people and the mismanagement of the banks and the crisis has cost the Irish taxpayer €62 billion," Mr Noonan said this afternoon. "All of the Government actions since taking office in March 2011, both at home and abroad, are designed to repair this damage and break the negative link between the banks and the State. We are making significant progress in this regard and the ending of the Guarantee for new liabilities marks another step forward."

The current scheme was set to run until June 30th, 2013, and late last year ratings agency Fitch warned that this would likely be the last extension.

Mr Noonan said the bank guarantee scheme had proved controversial.

"We feel the time is right and the banking system in Ireland is normal enough to proceed without the guarantee, " he said.

"The guarantee was a decision made in an emergency and we have moved out of the emergency ward now. We have moved back to normal conditions."