Banking laws prompt standoff with ECB

THE proposed new banking laws giving sweeping powers to Finance Minister Brian Lenihan and his department has provoked a standoff between the Government and the European Central Bank.

The ECB claims the power given to the minister could undermine the collateral put forward by the Irish banks for the substantial €136 billion of loans drawn down from the ECB during the current crisis.

The ECB said the proposed legislation would undermine its claim to the collateral offered by Irish banks for the monies borrowed.