Bailout move makes headlines from Sydney to New York

UNPRECEDENTED times call for unprecedented measures, and this week’s Government bailout package for Irish banks was certainly a pioneering departure.

While the scale of the legislation sparked immediate concerns on the opposition benches, the €400bn package, which will guarantee all the deposits and debt of the banking system, may prove vital to prevent economic meltdown.

Reported far and wide — from the New York Times to the Sydney Morning Herald — the enterprising plan has caused a stir around the world, with one Australian financial expert Scott Rankin stating: “The Irish Government takes out its bazooka.”

While another leading US financier called it a “brilliant move”.

What the long-term implications, if any, may be are not clear, but countries across the world may follow suit to guarantee their banks too can lend in security and safety.

Ireland insures top bank deposits

The Government of Ireland yesterday took decisive action to prevent a crisis of confidence in its banking sector by immediately insuring as much as $600 billion worth of debt and deposits at its six largest banks.

“It’s a pretty brilliant move,” Tom di Galoma, head of US government bond trading at Jefferies & Co in New York.

Bailout fever: Ireland guarantees all bank deposits, debts

The Irish Government guaranteed all deposits and debts of the country’s major banks, one day after the Irish stock market plummeted 13%, nearly twice the decline of the Dow Jones industrials.

One argument against any such blanket guarantee is that when you insure everything, you insure nothing. But for the moment, Irish investors are happy about the move.

Irish Government guarantees bank deposits

Ireland’s Government said it will guarantee Irish banks’ deposits and debts for two years, seeking to calm investor concern after banking shares fell 26% in Dublin.

It is the most dramatic and comprehensive bank bailout in Europe since the Scandinavian rescues of the early 1990s and may serve as a model for Britain and other countries that so far have been muddling through from one mishap to another with a mish-mash of ad hoc policies.

Europe moves to calm ripple effect of crisis

In Ireland, where a record plunge in the stock market Monday and rumours of bank withdrawals have spooked investors, the Government announced a blanket guarantee for all depositors and creditors of six Irish banks.

The decision commits the Irish Government to backing $400 billion in liabilities, an amount twice the country’s annual economic output.

Brian Lenihan Jr, Ireland’s finance minister, urged other European Union governments to consider the Irish solution.

Britain’s savers bank on Ireland to protect money

British savers are looking to shift their money into Irish banks after the Government there gave a 100% guarantee to back all savings in the country’s six banks.

Irish banks boost European stocks

Irish banks gave the hard-pressed European financial sector a boost on Tuesday after Ireland’s Government said it would guarantee 100% of savers’ deposits as well as providing a range of other guarantees on covered bonds and senior debt.

The move came after Monday’s 13% fall for Ireland’s stock market, its worst one-day decline in more than a quarter of a century.

Irish banks’ guarantee unlikely to be matched — or, at least, not yet

British banks are worried they will lose savers to the Irish and are pressing the Government to match the Irish guarantee. Gordon Brown said yesterday that there were no plans to do so, though he was careful not to rule it out.

Ireland guarantees bank deposits

Ireland announced a two-year guarantee on savers’ deposits in six major banks Tuesday in a bid to bolster the country’s financial system amid global economic turmoil.