The big difference between the two plans is the short-term ELA is run by the Central Bank of Ireland while the new initiative would be under the leadership of the ECB governing council. Ireland's banking sector has about E100 billion in outstanding loans from the ECB in unlimited, fixed-rate refinancing operations with maturities of up to three months.
Under the new proposal, the Irish central bank would assist the troubled banks with an additional E70 billion in emergency lending. The ECB has been vocal in its proposal to wean Ireland's most trouble banks off of their emergency fixed rate, unlimited refinancing operations.
To help cap their losses, the Irish banking system has put some of the country's troubled banks on the selling block. One ailing bank, Ireland's Education Savings Bank, caught the eye of the consortium consisting of Wilbur Ross' WL Ross & Co., Carlyle Group and Dublin-based Cardinal Group. But with the ECB's loan plan, could this put the Education Savings Bank deal in jeopardy?
Sources close to the situation say the ECB plan is unlikely to derail the deal.
"Irish banks, like most European banks, do not have nearly enough deposits from their own local customers to equal the amount of loans they have made. Therefore all of them need to borrow in the European short term and/or long term wholesale deposit market. Ireland has been guaranteeing their deposits and undoubtedly will have to continue doing so, until the austerity programs take hold and restores Ireland to its former state as the economic miracle of Europe. Ireland does not need structural reform like the club med countries in southern Europe," said one person close to the deal.
Earlier in March on Squawk Box, Ross was sounded optimistic about Ireland's prospects.
"Ireland is going to go through a period for a little while the Irish people are resilient. The government has moved very aggressively to deal with the problem. Ireland will have a V-shaped recovery, as opposed the wobbly things that may happen elsewhere in Europe," Ross said.
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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."