Govt to extend bank guarantee scheme
The bank guarantee scheme is being extended to the end of the year, it was announced today.
The Government guarantee for short-term bank liabilities had been due to expire at the end of this month, but will now run until the end of this year.
Finance Minister Brian Lenihan has described the further extension as an important support to the Irish banking system which will help maintain the overall stability of the sector.
Six institutions are covered by the guarantee which includes corporate and interbank deposits as well as debt securities.
Meanwhile Taoiseach Brian Cowen has described the cost of borrowing to Ireland increasing to a record high as "part of the ebbs and flows of sentiment".
At one stage today, investor yields being sought on 10-year Irish bonds rose to above 6.1%, the highest it has been in the history of the euro.
Greek and Portuguese bonds were also put under similar pressure.
Fresh concerns about the cost of Anglo Irish Bank, coupled with media articles casting doubt on the accuracy of the results of recent "stress tests" by the ECB - are being blamed.
But Mr Cowen insisted it was all part of the operation of the market.
"There has been turbulence generally in international bond markets for some time," he said, describing the rise in the cost of borrowing as part of the ebb and flow of sentiment.
He also tried to calm market fears that Ireland would fail to get its financial affairs in order.
"We are absolutely committed to maintaining our plans (and) imposing the budgetary discipline that we set out with the European Commission," Mr Cowen said.
The Taoiseach also described Minister Lenihan's discussions with Europe on Anglo as having "gone well" and said they should be brought to a conclusion quickly.
