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What is the quid pro quo for bank guarantee?

30 September, 2008


Sinn Féin Finance Spokesperson Arthur Morgan TD has this morning welcomed the government's decision to guarantee all deposits in Irish banks however the Deputy has also demanded that the Finance Minister immediately outline what quid pro quo he has secured from the banking sector as well as detailing to the Oireachtas the terms and conditions of the deal agreed.

Deputy Morgan added:

"I am calling on Finance Minister Lenihan to today outline to the Oireachtas the terms and conditions of this guarantee.

"State intervention to protect Irish banks is essential to stabilise the market and protect ordinary investors. However we need to know what is the quid pro quo? What has this government extracted from the banks in return for bailing them out?

"The current global finance crisis is of the sectors own making and this government like many others across the developed world have allowed such a collapse to take place due to their refusal to put in place adequate regulations to protect ordinary investors from the finance sectors reckless practice of buying and selling cheap money to one another.

"Today's announcement needs to herald a new relationship between the state and the banking sector. Sinn Féin has always argued for a state bank and this morning's announcement by government is evidence alone of the value in such a proposition. With a state bank government can adequately protect the investments and deposits of ordinary citizens and small businesses whilst wisely investing profits back into the public purse to the advantage of all.

"When the Government bailed out AIB in the eighties after the ICI collapse, a levy was introduced on the banks. This must be re-examined. There must also be a commitment from bank management to forego bonuses for the length of the time covered by this guarantee.

"Maintaining international confidence in the Irish banking system is a priority however today must be a line in the sand of reckless practices in the Irish financial sector and a new day of responsible banking must begin." ENDS

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