Bank of Ireland deposit charge strategy

A move by the Bank of Ireland to dissuade large companies from parking €10m or more in short-term deposits is a “defensive” strategy for the lender in an era of rock-bottom interest rates, a leading economist has said.

Philip O’Sullivan, chief economist at Investec Ireland, said charging for large deposits will affect a small number of big corporate customers who are unlikely to be Irish-based, when banks elsewhere are starting to charge customers for their deposits.

The effect on the State —which moves millions of euro in short-term deposits through the bank — will likely be “absolutely minimal”, the economist said.