State allowed to maintain guarantee for ‘fragile’ banks

THE state will continue to guarantee short-term bank liabilities including corporate and inter-bank deposits and debt securities in Ireland’s banks to the end of the year, the European Commission has agreed.

State allowed to maintain guarantee for ‘fragile’ banks

Finance Minister Brian Lenihan had asked for the extension after fears companies would withdraw short-term money from AIB, Bank of Ireland and Anglo Irish Bank when the guarantee ran out at the end of the month.

Mr Lenihan said that the commission agreed to the extension as it understood the fragile state of the Irish banks. He did not rule out looking for a further extension in December.

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