Cowen unable to say when bank scheme will be finalised

TAOISEACH Brian Cowensaid he could not say when the details of the Government's bank guarantee scheme will be completed.

"There will be a need for discussions between the authorities and the EU Commission in order to ensure that the scheme meets State aids and competition requirements," he added.

Mr Cowen, who was replying to Fine Gael leader Enda Kenny, in advance of last night's Cabinet meeting, said it was an evolving situation.

He added that what had been done last week reflected the need to provide confidence in the markets to deal with capital outflows from Irish credit institutions to the extent that it would reach the stage where the Government needed to act.

Matters relating to lending practices, and how the scheme proceeded further, were for the Financial Regulator and the Central Bank, dealing with the overall financial stability of the system itself.

"Obviously, the legislation, which was considered in the House last week, provides some options in that regard," he added.

The issue being dealt with last week related to the need to improve liquidity where global financial markets had dried up to a very large extent.

"That situation has not dramatically improved in a global sense. The issue still remains . . . We are not in any way out of the woods regarding this matter," said Mr Cowen.

Mr Kenny said that while his party supported the action taken by the Government it was important to know the conditions attached to it.

Pressed further on the issue by Mr Kenny, the Taoiseach said the Minister for Finance had already made it clear that applications would be considered for inclusion in the guarantee scheme from the subsidiaries of parent bodies which were regulated outside the jurisdiction.

The Irish authorities would need to be satisfied that the necessary terms and conditions were met in each case, said Mr Cowen.