Dublin Opinion

That was then…

Ireland’s decision to guarantee Irish banks’ deposits and debts for two years to calm investor concern could be followed by other countries. This may be a template for rescues elsewhere if Irish banks can replenish their capital base,” Harvinder Sian, a fixed-income strategist at Royal Bank of Scotland Group Plc in London said in a note today.” (Irish Independent, 30 Sept 2008)

”This is a massive step by the government to alleviate financial stress in the domestic system,” Eamonn Hughes, head of research with Goodbody Stockbrokers, wrote in a note today. ”This presumably puts the Irish banks in better shape to seek funding compared with other non-guaranteed banks in international capital markets”. (30 Sept 2008)

”This is an unbelievably positive move for the Irish banking sector,” said Kevin McConnell, head of research at Bloxham Stockbrokers in Dublin, in a phone interview. ”It’s really exceptional.” (30 Sept 2008)

“Brian Lenihan, the Minister for Finance, could have chosen to nationalise the failing banks, but instead they opted for a more imaginative solution. By guaranteeing all the deposits in the Irish banks, and by also guaranteeing all inter-bank lending, they prevented a run on the banks and they made it possible for them to borrow money on the international markets.” (Editorial, Sunday Independent, 5 Oct 2008)

And this is now…

The Government is under intense pressure to pump billions of taxpayers’ money into the banks, amid fears that any further delay could lead to the collapse of hundreds of companies.

Businesses all over the country are finding it impossible to borrow any cash and many face going to the wall soon.

Opposition parties demanded urgent action yesterday as stocks in Irish banks continued to crash.

Shares in Bank of Ireland plunged 23.5pc — below the key psychological €1 level — to 83c as speculators gambled on the State injecting fresh funds into banks.

Allied Irish Banks slid 10.2pc and Anglo Irish Bank tumbled 13.9pc.

The Department of Finance last night sought to dampen speculation about an imminent move. A spokesman said: “We don’t intend making any announcement in relation to the banking sector this week.” (Irish Independent, 18 Nov 2008)