Ireland looks to extend bank guarantee to end: 2010

Ireland is seeking to extend its bank guarantee scheme until the end of this year in discussions with EU Commission, Finance Minister said.

Ireland looks to extend bank guarantee to end: 2010

 

Ireland is seeking to extend its bank guarantee scheme until the end of this year in discussions with the European Commission that will be completed this month, Finance Minister Brian Lenihan said on Thursday.

Ireland last month joined 13 other EU countries -- including Germany, Sweden, Spain, Latvia and Poland -- in getting its state guarantee scheme approved until end-June and analysts expected Dublin to look for a further extension.

Ireland, which is battling hard to manage a heavy sovereign debt burden, first issued a guarantee for some 400 billion euros of bank liabilities at the height of the credit crisis in September 2008, in what then was one of the most extensive scheme of its kind.

The guarantee, which was originally for two years, was amended last year to give banks scope to issue debt with maturities of up to five years, but still with a 2010 issue deadline and periodically reviewed by Brussels.

"The terms of the prolongation of the scheme being finalised with the Commission would see it being extended under the current terms and conditions until the 29th of September 2010," Lenihan told parliament.

"Beyond this the guarantee would be modified to provide for a prolongation ... to the 31st of December ... as an issuance window for liabilities of between 3 months and 5 years duration.

"It is likely that the pricing of the guarantee will also change in line with the pricing structure outlined by the European Commission."

The government would eventually like to phase out the guarantee, a big potential liability for a state with one of the euro zone's biggest debt burdens.

Allied Irish Banks in November ventured beyond the guarantee with a 750 million euro five-year bond, but a market assault on states on the euro zone's periphery has made funding conditions especially difficult.

Reuters

Last Mod: 17 Haziran 2010, 20:40
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