Main banks ‘need cash injection now’

WORRIED bank employees and the Consumers’ Association of Ireland have called on the Government to bring forward its plans to pump billions of euro into the country’s two remaining top banks.

About €4 billion of taxpayers’ money is being invested into the two banks, in a bid to stabilise the long-term future of Ireland’s banking system.

Both banks have indicated, however, they may seek more capital injection than this. The initiative was announced by the Government in late December.

The Irish Bank Officials Association (IBOA) said last night it wanted a clear plan to be laid out by the Government. IBOA general secretary Larry Broderick went on to suggest there was a need to prioritise the capital injection scheme in light of the speed with which changes were happening within the banking system.

“The Anglo takeover is welcome, but does cause concern. We need an international renowned person to carry out an inquiry, not the regulator or a board appointed person.

“The recapitalisation plan does need to be prioritised,” added Mr Broderick.

The association’s general secretary said his organisation had no idea yet what impact the plan might have on members’ jobs in banks and financial institutions.

“We’re in the dark,” he said.

Consumers’ Association of Ireland chief executive Dermott Jewell said recapitalisation had to be fast tracked. “We’re left with the two biggest banks which we must give our fullest attention to. Specifically so our international image doesn’t become tarnished.

“What we need is an element of control and support fast tracked. We’ve got to be conscious of the honest everyday customer who’s the one keeping the banks in business,” said Mr Jewell.

According to the Department of Finance, there are no plans at present to change the timetable for recapitalisation.

A spokesman last night said: “The plan is still as it was set out in December. And it will be put to shareholders in March.”

Under the plans, which must be approved by the banks’ shareholders, each institution will issue €2bn of shares to the state.

The shares will give the Government voting rights in terms of changes as well as decisions on who controls the bank. A key objective of recapitalisation is to ensure the continued flow of funds through the banks to individuals and businesses.

Both Bank of Ireland and AIB have also agreed to new business start-up funds and commitments to support first-time buyers.