FG voices concern about bank guarantee scheme

Fine Gael has voiced concern about what it says are the low charges applying to financial institutions which avail of the Government's bank guarantee scheme.

The party says it is still generally supportive of the plan to guarantee all deposits in the main banks operating in Ireland.

However, it says it is worried that these banks will only face a total fee of €1bn for availing of the €500bn insurance policy.

The Government had previously indicated that the measure would cost the banks at least €2bn.

Finance Minister Brian Lenihan is defending the massive reduction in this figure, saying it will allow Irish banks to operate in the current difficult economic climate.

He also says the guarantee scheme has proved very effective so far and no Irish-owned banks have gone out of business.

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