Government plans to control bank salaries

The Government plans to place “proper controls” on salaries for bank employees working for the institutions covered by the Government’s guaranteed of €440 billion in deposits and debts at the Irish banks.

The Minister for Finance Brian Lenihan said that he has established a committee "to determine salaries for the banks that are now covered by the State guarantee scheme and I am looking forward to hearing from them in a number of weeks".

Mr Lenihan was responding to weekend newspaper reports that a number of middle ranking executive in Anglo Irish Bank would receive bonus payments for last year.

"As far as Anglo is concerned I understand that bonus was cleared before the State made an offer to buy the institution. I am extremely concerned that it happened," he told RTÉ's Morning Irelandprogramme.

He said the "misbehaviour by management at Anglo Irish Bank meant that even with a State guarantee there was uncertainty about the viability of the bank".

This had forced the State to become a 75 per cent shareholder in Anglo Irish to safeguard the deposits.

"It is essential that we make it clear to the world that those who invest in the Irish banks, who deposit in the Irish banks, can rest in security and safety that their deposits are safe. That is a crucial eruptional issue for Ireland. "

Mr Lenihan said the reason he was working so hard on the banks was to "safeguard Ireland's reputation among those who have entrusted our money to us and secondly to ensure that banks lend to those that are struggling with their businesses and their jobs in the economy."

Six banks are covered by the guarantee scheme; AIB, Bank of Ireland, Anglo Irish Bank, Irish Life Permanent (ILP), the Educational Building Society (EBS) and Irish Nationwide Building Society (INBS).