The existing guarantee, which covered all liabilities, has already been replaced by a more limited scheme that was agreed with the European Commission in June and runs until the end of December.
Brian Lenihan, finance minister, told Irish radio last week: “We want to see them [the banks] off the guarantee as soon as possible. What we’re talking about here is the phasing out of the guarantee over time.”
Patrick Honohan, governor of the Central Bank of Ireland, says he is “not in a rush” to remove the guarantee, but any extension should be on a quarterly basis, rather than for another year “because if they’ve done the job properly, that won’t be necessary”.
Irish banks have not been able to access the debt markets for several months, but Bank of Ireland looks set to test the waters first and is expected to announce a bond issue of about €1bn next month.
Analysts expect all the banks to issue debt before the end of the year.
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