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The head of the National Treasury Management Agency John Corrigan said he "expects" the country's banks to pay a coupon to the Government.

Speaking at a Dáil committee in Dublin today, Mr Corrigan said failure to pay the coupon won't automatically lead the government to take a bigger stake in the lenders. The NTMA chief executive said he would prefer the banks to pay the coupon in cash rather than shares. He said he is "in no rush" to collect the shares, and will await a European Union decision on the coupon before deciding how to proceed.

AIB and Bank of Ireland have suspended the payment of coupons on some securities after they submitted restructuring proposals to the European Union.

Mr Corrigan said the EU has indicated that the coupon stopper is not intended to be permamenent for the state's investment in the banks.