Today chief executives from the six Irish banks and building societies that are covered by the State guarantee scheme have separate meetings with Finance Minister Brian Lenihan (right).The series of these one-to-one confessional meetings comes in the wake of the Price Waterhouse Cooper report on the future debts and capital requirements for the six Irish financial institutions covered by the scheme, which was announced by the government in September.
The participants in the talks might be especially cautious, as world markets have once again tumbled, following sharp overnight losses on Wall Street, prompted by a fresh wave of jobs cuts in the USA and another gloomy economic outlook.
But - amazingly - Irish bank shares are among the very few that are rising today. However, one should not forget that on Monday and Tuesday of this week they were hitting rock bottom, with both Bank of Ireland and Anglo Irish Bank shares falling below the € 1 mark for the first time ever. On Tuesday Bank of Ireland shares were even close to 80 cents for a while, and I suppose they could not fall much further without the whole business imploding completely. And - as we have seen in recent weeks only too often - short-term gains on the world's stock markets are often followed by further drops in value.
Today's rises are mainly on expectations that the government is edging closer to a refinancing deal for the nation's main financial institutions.
Earlier this week the Taoiseach had told the Dáil that "the often mentioned recapitalisation of banks alone will not solve the issue of access to credit for small businesses".During leaders' questions Brian Cowen (above left) said that the government was "looking at a range of measures to remedy the liquidity problem", but he was "constrained in revealing what they are at this time". This was another fine example of procrastination in true Offaly style.
Under the bank guarantee scheme, Cowen stated, all covered banks were drawing up business plans, and this process was now "at an advanced stage". He also announced that the Financial Regulator had received a draft report on the banks from the consultants Price Waterhouse Cooper.
Today the government expects to receive the full business plans from the financial institutions.
Brian Cowen said that if these plans did not contain measures to provide adequate lines of credit to businesses, they would be rejected.
Labour Party Leader Eamon Gilmore (right) declared that the government sounded "like helpless bystanders", while Fine Gael Leader Enda Kenny demanded that the banks be recapitalised.He reminded the Dáil that 10,000 Irish jobs were being lost every month as small businesses got squeezed.
Meanwhile the International Monetary Fund (IMF) has approved a loan of more than $ 2 billion to Iceland, to help it cope with what has been described as "a banking crisis of extraordinary proportions".
The government of Iceland had asked the IMF for help after its banking system collapsed within hours last month. Let's hope that Ireland will be spared such a traumatic experience.
The Emerald Islander
