Irish Fin Min: Banking System Must Remain Sustainable

Oct.02, 2008 in Market Outlook

DUBLIN (Dow Jones)–Ireland’s finance minister said Tuesday that the decision to
guarantee the banking system for two years was primarily aimed at addressing
liquidity concerns and ensuring banking funds don’t dry up.

Finance Minister Brian Lenihan said if funds dried up for Irish banks it would be
“very, very serious for the Irish economy” and said that the government wouldn’t
in theory bail out a particular bank.

“The Irish banks will find it easier to access funds from world markets,” he told
state broadcaster RTE Radio. “The key bloodstream of the Irish economy must
remain sustainable.”

Lenihan said the government’s move is aimed to protect taxpayers’ funds. He said
the government will charge the banks for the guarantee, but didn’t give more
details of the charge.

Earlier Tuesday, the Irish government announced a surprise decision to safeguard
the Irish banking system, guaranteeing all deposits, covered bonds, senior debt
and dated subordinated debt with the four main banks, as well as two building
societies and subsidiaries.

The guarantee runs from midnight Sept. 29, 2008, and expires at midnight Sept.
28, 2010, and follows the decision last week by the government to guarantee
deposits in Irish banks up to EUR100,000.

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