Government not forced into rescue, says regulator

THE financial regulator Patrick Neary denied last night that the Government was forced to give unprecedented guarantees to the Irish banks to protect one of them from going under.

It has been speculated that Anglo Irish Bank, whose shares fell dramatically on Monday was the key target of the government guarantee that covers €400 billion of deposits and loans tied up in the country’s six banks.

The Government’s decision was taken in response to the unprecedented shortage of liquidity in global markets and for no other reason, he said.