Irish central banker hangs "For Sale" sign on banks

Ireland's banks are effectively up for sale, central bank Governor Patrick Honohan said on Tuesday as Dublin sought aid from the European Union and International Monetary Fund to prop up its lenders.

"They are for sale as far as I am concerned," Honohan said. "I've been an advocate for a number of years for small countries to have foreign owners for their banks."

Honohan also said he expected there to be a lot of conditions attached to any bailout deal and that the lack of confidence being shown by financial markets in the country's banks and government was not justified.

The support of the IMF should raise confidence, he told a meeting of accountants in Dublin.

"If there are big numbers announced in a deal it is not certain that they will all be drawn down. To the extent that they are drawn down, to a large extent they will be substituting for market funding," Honahan said, describing bailout loans as "a kind of a backstop for the banking system."

Irish Prime Minister Brian Cowen defied mounting pressure to quit on Monday, saying he would stay in office until parliament passed the budget, then call an early election.

"Of course there will be a lot of conditions because additional resources cannot be used to relieve the budget. The budgetary correction has to occur or else things won't add up," Honohan said.

[Source: Reuters, Dublin, 23Nov10]

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