Anglo Irish Bank is expecting some restrictions to be placed on the deposit rates it can offer in the market once the EU Commission delivers a verdict on its restructuring plan.
The bank has already been told by the UK's FSA that its rates cannot be in the top 10 in the UK, curbing its ability as a deposit gatherer there. It has, however, managed to retain attractive rates in the Isle of Man, which has a separate regulator.
Yesterday the bank was offering 3.5pc in Ireland for its fixed-term reward account and an on-demand account was offering rates of 3.2pc.
The other Irish banks -- in private -- have expressed reservations about Anglo's deposit rates, with AIB departing chief executive Colm Doherty describing the market as "dysfunctional''.
Anglo is to be split into a recovery bank and a funding bank. The latter will be a deposit taking institution and will contain about €54bn of deposits and also some NAMA bonds.
The recovery bank will house property loans amounting to €38bn. Unlike a plan advocated by chief executive Mike Aynsley, this bank will house both performing and non-performing loans.
Ultimately, this bank will be wound down and, as a result, it won't need as much capital as a normal bank.
The funding bank will be facing the toughest fight -- to gain and retain deposits, even though it will also ultimately be wound down.
The ratings agencies have already spoken about this bank no longer having the "systemic'' importance of the old Anglo.
The Government and the bank are currently working on a plan to submit to the EU Commission and Finance Minister Brian Lenihan claims it is likely to get the support of the commission.
However, the commission has to ensure that the bank does not distort the Irish banking market and other banking markets, like the UK.
Because of the sheer scale of the state assistance Anglo has received, the commission will pay extra attention to possible distorting effects.