Michael Noonan announces Ireland’s bank guarantee deal to end in March
Controversial 2008 deal led to Troika bail-out
The bank guarantee deal that collapsed the Celtic Tiger economy will expire at the end of March.
Ireland’s Finance Minister Michael Noonan has announced that the infamous scheme will cease to exist at midnight on March 28.
Noonan told the Irish Sun: “The guarantee was a decision made in an emergency - and we are out of the emergency ward now.
“The Irish banking system failed the Irish people and the mismanagement of the banks and the crisis has cost the taxpayer 62billion.”
Noonan also stressed that the cabinet backed move will not affect customer deposits.
He said: “This is another step forward on the road to economic recovery and will help to sustain our re-entry into international markets.
“Irish lenders are moving back into a normal banking space.”
The controversial bank guarantee was signed by former Taoiseach Brian Cowen and then Finance Minister Brian Lenihan in the early hours of September 29, 2008. It led to the Troika rescue bailout less than two years later.
Minister Noonan added: “I don’t want to go back in time to discuss whether it should have been introduced.
“But the removal of the guarantee will release taxpayers from a possible liability of €73billion and will also be welcomed by the banks themselves.
“It cost the banks money - they had to pay for the use of the guarantee. When that burden is taken off them, it will make stronger banking because they will be profitable first of all.” Noonan also insisted that terms and conditions for bank customers will improve as a result of this action.
A separate scheme to guarantee customer deposits up to $130,000 will now be made permanent.
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