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Minister for Finance Brian Lenihan said today director borrowings at Anglo Irish Bank were "unacceptable behaviour" and expressed surprise the financial regulator knew about the matter at some level.

Anglo's chairman Sean FitzPatrick and chief executive David Drumm resigned within hours of each other last week after Mr FitzPatrick said he had transferred loans of around €87 million that he had received from Anglo to Irish Nationwide before each year-end over a period of eight years.

Mr FitzPatrick said in a statement last week while the transfer of the loans did not breach banking or legal regulations, it was "inappropriate".

"In relation to Mr FitzPatrick's loans, I think this is unacceptable behaviour," Mr Lenihan said in an interview on RTÉ radio this morning.

"The position taken by Mr FitzPatrick is that there was nothing illegal involved, but if there was nothing illegal involved it was grossly unethical because it involved the concealment of essential information from the shareholders of the company and from the auditors," Mr Lenihan said.

The financial regulator said on Saturday it would investigate directors' loans at all banks and building societies covered by a €400 billion Government guarantee programme.

The Irish Financial Services Regulatory Authority became aware of the loans at Anglo Irish in January but its board said over the weekend it was only notified about them on Wednesday.

"I was very surprised to learn ... that at some level within the organisation there was already an awareness of the loan to Mr FitzPatrick and that had not been communicated to the board, to the department or to the minister," Mr Lenihan said. "That is a very very serious matter."

Shares in the two of the State's largest banks - Allied Irish Banks and Bank of Ireland – rose in early trading today following the Government’s decision to inject up to €7.5 billion to recapitalise them.