How would folks rate the chances of an Irish pillar bank failing in 2012 and defaulting on deposits above the guarantee limit? Trying to make some decisions regarding wedge at the mo. Euro collapse is less of a worry, to be honest.
I think the probability of losing the money completely is very low even in the worse case scenario. Saying that, I believe the probability that all money above the old guarantee (25k) being locked down for an extended amount of time (1 year plus ) is very high. Also be aware that in the past governments have a habit of turning part of large sum deposits into government bonds. i.e a forced loan to the government. I think that has a fairly high probability in this situation. If they lose the ECB money and they cannot find a foreign bank to take on the retail deposit base then expect the high value depositors to be embonded and becoming defacto bondholders of the banks.
So something like 25K fully accessible after the transition period (6 to 8 weeks), next 25K turned into a fixed term deposit a/c with a term of 6 months / 1 year and the balance being converted into sovereign / bank "green jersey" bonds. Expect to see Gay Byrne in a very somber serious mood doing the TV adverts explaining why the "green jersey" bonds are vital for the survival of the country. Patriotic duty etc etc, intercut with footage of riots in Greece, then the verdant Irish landscapes with rosy cheeked children in the foreground looking anxious, future of Ireland etc..etc. think of the children, with plaintive uilleann pipes soundtrack the background rising to a crescendo of unplaced loss. You know, the same old shite.
So you might end up not only being a customer of your bank but the owner too.