Honohan: Government will up stake in banks

THE Government will have to buy further stakes in the country’s banks as a result of the banking meltdown, Central Bank governor Patrick Honohan disclosed yesterday.

It will also have to sustain its attack on reforming national debt in order to give a clear signal to the markets that it will not go soft on fiscal reform, he said.

The governor warned the banks would have to get back to lending to business if they want to get back to making profit. It is in the banks’ own interests to ensure growth in lending to small firms, as property-based lending will be greatly reduced in the years ahead, he said.