Ireland extends bank guarantee scheme

Ireland said it was extending its banks guarantee scheme to some foreign-owned banks operating in the country, raising the amount of liabilities covered by 10 percent to 440 billion euros.
Finance Minister Brian Lenihan said the scheme, which already guaranteed the debts and deposits of the six biggest Irish-owned banks, would be "available to certain banking subsidiaries in Ireland with a significant and broadbased footprint in the domestic economy".
He named the eligible banks as Ulster Bank, which is part of Royal Bank of Scotland Group Plc, First Active, Halifax Bank of Scotland — a unit of British bank HBOS Plc — IIB Bank, owned by Belgium's KBC, and Postbank, a joint venture between Belgian-based Fortis and the Irish post office.
When it was unveiled last week, Ireland's plan to underpin confidence in a faltering domestic financial system triggered cash transfers from Britain, sparking concerns in both Brussels and London the scheme discriminated against non-Irish banks.
The European Commission said Ireland's decision to extend the scheme may remove a sticking point with European Union regulators. Limiting the programme to Irish banks had been a problem for the EU executive, which monitors whether national decisions are compatible with the bloc's laws on state aid and competition.