Financial Regulator backs deposits-guarantee plan

The Financial Regulator is giving its backing to the Government's plan to underwrite the loans and deposits of six Irish banks.

The regulator’s office has said it is monitoring the movement of money between banks this evening as a major debate on the emergency legislation continues.

TDs are debating the first amendment of the 28 proposed changes to the Credit Institutions Financial Support Bill.

The Bill would give a two-year guarantee to six banks regulated in Ireland but does not include foreign banks that operate here.

There is speculation that another measure could be introduced for those banks, amid concerns on the part of the EU Competition Commissioner Neelie Kroes that they are being put at an unfair competitive disadvantage.

Today, as Ms Kroes awaited formal notification of the scheme from Dublin, she pointedly praised British government cooperation with Brussels over the Bradford and Bingley bail-out and made clear her displeasure that Ireland had set up bank rescue plans without consultation.