Banks see deposits fall after state guarantee ends

Deposits in the Irish covered banks fell 0.8% in the month after the removal of the eligible liabilities guarantee scheme.

The removal of the guarantee coincided with the financial crisis in Cyprus and the forced ‘bail-in’ of depositors over €100,000, which caused market turbulence across the eurozone.

However, apart from a once-off reclassification of a €1.2bn life assurance deposit, deposits at the three domestic banks fell by €1.2bn in April compared with the previous month. The total level of deposits stood at €153.4bn at the end of April.