ISEQ surges 5.45%

The ISEQ index of Irish shares has seen growth of 5.45% today on the back of the Government's unprecedented two-year safeguard for deposit accounts.

The Government's guarantee also covers all money borrowed by Irish banks from other financial institutions.

Banking stocks have rallied since the move was announced early today: AIB is up 15%, Bank of Ireland by almost 17%, Anglo Irish Bank by a massive 41.74% and Irish Life and Permanent by 25.54%.

Mr Lenihan said there would be an approximate €400bn liability to Irish taxpayers but charges and strict terms and conditions applying to the agreement would safeguard their interests.

Some analysts were crediting Ireland’s unprecedented move with helping to keep European stocks overall from falling nearly as much as stocks in the United States and Asia did.

“The Irish Government’s blanket insurance could form a template for a European approach to this crisis,” said Rob Carnell, London-based chief international economist at ING Financial Markets.