Govt mulling loan guarantee scheme

The State may announce a loan guarantee scheme for businesses struggling to get credit.

Tánaiste Mary Coughlan said there is continuing evidence that banks are reluctant to lend money into the economy.

The credit freeze may also get worse after ratings agency Standard and Poors declared it expects losses in Irish banks to top €50bn by next year.

The Tánaiste said the Government is examining if such a scheme is possible.

"The guarantee would be given by the State," she said. "There have been a number of bank guarantee schemes which have not been working well and we are learning from what has happened in other (EU) member states.

"We are also looking at a number of initiatives outside of the European Union."