Ratings agency Fitch said it may downgrade the short-term issuer default ratings – which measures the likelihood of a debt default – on four Irish banks.

AIB, Bank of Ireland, EBS Building Society and Irish Nationwide Building Society all have a short-term issuer default rating of ‘F1’, the highest available, but have been placed on watch for a possible downgrade due to expected changes in the Government guarantee.

Under the Government scheme the State has guaranteed all deposits, covered bonds, senior debt and dated subordinated debt at financial institutions in six Irish banks.

The Government guarantee is scheduled to run for two years.