Regulator to investigate banks

The Financial Regulator is investigating officers in both Irish Life and Permanent and Anglo Irish Bank.

The revelation came just hours after Irish Life and Permanent chief Denis Casey resigned following the bank's controversial €7bn deposit into Anglo Irish.

It had not been clear up until the Authority issued a statement last night that it also has investigating officers in Irish Life and Permanent.

They haveve been mandated to complete their work in both institutions as a matter of extreme urgency.

The Financial Regulator also states that it views as completely unacceptable the issues which have emerged relating to the two bank's transactions.

It said it encouraged Irish banks to work together where necessary so as to continue to use normal inter-bank funding arrangements for liquidity purposes.

The Authority however utterly rejected any suggestion that this would have constituted encouragement of the type of circular transactions that have emerged.