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13/10/2008
EC Approves Bank Bail-Out
The European Commission has approved Ireland's controversial bank guarantee plan, Prime Minister Brian Cowen said on Sunday.
"Modifications agreed with the Commission do not alter the basic parameters of the scheme as announced," Taoiseach Brian Cowen said last night.
He commented that EC President Jose Manuel Barosso told him personally the bail-out package had been given the green light by Brussels.
There were concerns that the deal - which covers six Irish-owned banks and five foreign financial institutions with a significant presence in Ireland - may have contravened competition regulations.
It even sparked a minor diplomatic row with the UK government as the big banks there pressured No. 10 to act on what was seen in some quarters as 'unfair' competition.
However, after a summit of European leaders in Paris, Mr Cowen said the rescue scheme, with modifications agreed with the EC that did not alter its basic parameters, was rubber-stamped.
"I very much welcome that, following detailed discussion with the Commission, the scheme is now in compliance with EU requirements," Mr Cowen said, on his return to Dublin.
"The arrangements that we have agreed in Paris tonight to govern potential future action by member states do not impinge on the Government's guarantee scheme and I welcome my colleagues' confirmation of this."
The Irish guarantee originally covered just six Irish-owned banks - Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent (which owns Permanent TSB), Irish Nationwide Building Society and the Educational Building Society.
However, last week Finance Minister Brian Lenihan announced five other non-Irish institutions with major operations in the Republic would also be included, with some limitations.
These are Ulster Bank, First Active, Halifax Bank of Scotland, IIB Bank and Postbank.
However, and perhaps by way of compromise as £millions migrated last week from the main UK banks into locally-based branches of Irish-owned banks across the UK, the Irish government signalled at the time that only deposits at their Irish branches and operations will be eligible for the scheme.
Meanwhile, in a further financial development, the UK government has announced a huge £37bn bail-out for three top banks, Royal Bank of Scotland (RBS), Lloyds TSB and HBOS.
RBS has been forced to go to the treasury for a £20bn bailout. Lloyds TSB and HBOS will receive a £17bn investment of new capital.
Barclays however, plans to raise £6.5bn from private investors. The bank will scrap its final dividend payout for 2008, saving it £2bn.
See: £37bn Government Bail-out For Banks
(BMcC)
"Modifications agreed with the Commission do not alter the basic parameters of the scheme as announced," Taoiseach Brian Cowen said last night.
He commented that EC President Jose Manuel Barosso told him personally the bail-out package had been given the green light by Brussels.
There were concerns that the deal - which covers six Irish-owned banks and five foreign financial institutions with a significant presence in Ireland - may have contravened competition regulations.
It even sparked a minor diplomatic row with the UK government as the big banks there pressured No. 10 to act on what was seen in some quarters as 'unfair' competition.
However, after a summit of European leaders in Paris, Mr Cowen said the rescue scheme, with modifications agreed with the EC that did not alter its basic parameters, was rubber-stamped.
"I very much welcome that, following detailed discussion with the Commission, the scheme is now in compliance with EU requirements," Mr Cowen said, on his return to Dublin.
"The arrangements that we have agreed in Paris tonight to govern potential future action by member states do not impinge on the Government's guarantee scheme and I welcome my colleagues' confirmation of this."
The Irish guarantee originally covered just six Irish-owned banks - Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent (which owns Permanent TSB), Irish Nationwide Building Society and the Educational Building Society.
However, last week Finance Minister Brian Lenihan announced five other non-Irish institutions with major operations in the Republic would also be included, with some limitations.
These are Ulster Bank, First Active, Halifax Bank of Scotland, IIB Bank and Postbank.
However, and perhaps by way of compromise as £millions migrated last week from the main UK banks into locally-based branches of Irish-owned banks across the UK, the Irish government signalled at the time that only deposits at their Irish branches and operations will be eligible for the scheme.
Meanwhile, in a further financial development, the UK government has announced a huge £37bn bail-out for three top banks, Royal Bank of Scotland (RBS), Lloyds TSB and HBOS.
RBS has been forced to go to the treasury for a £20bn bailout. Lloyds TSB and HBOS will receive a £17bn investment of new capital.
Barclays however, plans to raise £6.5bn from private investors. The bank will scrap its final dividend payout for 2008, saving it £2bn.
See: £37bn Government Bail-out For Banks
(BMcC)
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