Minister says'with substantial money amassed' taxpayer will not be exposed

REACTION:MINISTER FOR Finance Brian Lenihan has said the €10 billion recapitalisation programme for banks will not result in exposure to the taxpayer.

Mr Lenihan said on last night's RTÉ nine o'clock news that the substantial money in the national pension fund would be used to support the banks "on terms that will ensure a full return to the taxpayer and to the pension fund.

"There will be no exposure to the taxpayer on this because as a result of the good times, we do have substantial money amassed in the pension fund, so there is no question of fresh expense being incurred in this operation.

"The State is prepared to deploy its wealth to secure the banking sector in the interests of the whole economy."

Mr Lenihan said the banks would be assessed case by case depending on the importance of each lender to the financial stability of the State. Some financial institutions were so embedded in the economy, in terms of their borrowing and deposits, that they were of "systemic importance".

The institutions have been asked to submit their applications early next month.

Fine Gael spokesman on finance Richard Bruton said the announcement was vague and sketchy on detail. He said it seemed designed to buy time for the Government rather than to get cash flowing through the banks.

Ibec director general Turlough O'Sullivan said the scheme would ensure long-term stability and would have a positive impact on the ability of large and small businesses to acquire finance and trade successfully.