Guarantee plan will limit bank loans and deposits

IRISH banks will be prevented from growing bigger, lending more money or taking in more deposits, under the Government’s guarantee scheme, Finance Minister Brian Lenihan has said.

There will also be limits to the amount of individual bank assets and liabilities covered by the guarantee, as well as an examination of dividend payments.

The details of the €420 billion scheme were being finalised yesterday in conjunction with the European Commission and the European Central Bank, before being approved by the cabinet last night.