Labour want cap on salaries of bank bosses

The Labour Party is demanding the Government caps the salaries of bosses of the country's top banks involved in the €400bn rescue plan proposed yesterday.

The Government is hoping to complete the passage through the Dáil of the multi-billion State guarantee of top banks.

Politicians sat until almost midnight last night to debate the early stages of the emergency legislation which Taoiseach Brian Cowen insisted was vital to stabilise the country’s banking system.

Finance minister Brian Lenihan denied the two-year safeguard of deposits and borrowings in the six biggest banks was a “bail-out” and said taxpayers would be fully protected in the €400bn deal.

The Credit Institutions (Financial Support) Bill 2008 finally came before the Dáil at 10pm last night after drafting difficulties caused several delays, much to the annoyance of opposition parties.

Today, the Labour Party tabled 12 amendments to the bill, among them one which would preclude any bank official being paid more than the Finance Minister.

The party is also seeking increased parliamentary supervision of the plan, the establishment of an independent oversight board and a State shareholding in any institution bailed out by public money.

The European Commission (EC) confirmed its Competition Commissioner Neelie Kroes is in close contact with the Government and will examine the deal under state aid laws.

“The commissioner has been in close touch with the Irish authorities and will remain in close touch,” an EC spokeswoman said.

“It will look at any state aid involved as a matter of urgency.

“It expects notification from the national authorities and will take decision under the state aid rules soon afterwards.”