Irish Government to recapitalise country's three biggest banks

Commenting on the Irish Government's plans to recapitalise the country's three biggest banks, Kevin Mountford, head of banking at moneysupermarket.com said: "British savers were attracted to the Irish banks two months ago when the Irish Government announced it would guarantee 100 per cent of deposits until September 28, 2010, outstripping the deposit protection available in the UK. Since then Anglo Irish in particular has been offering marketing leading savings rate and has attracted a lot of new custom from British savers. Many of these people, including customers with savings in the Post Office and Bristol & West, which are both backed by Irish banks, will have been very concerned to see media reports that these institutions were in trouble.

"Savers will breathe a sigh of relief now that the Irish Government has backed its promise and stepped in to recapitalise Bank of Ireland, Allied Irish and Anglo Irish Bank. The Irish government will also introduce some new controls at a time that sees the resignation of several key officials within the Irish banking sector.

"Our advice to nervous savers is unchanged - despite the Irish Government's guarantee that it will protect 100 per cent of savers' deposits, we recommend that anyone with more than £50,000 in cash spread their money around between different institutions."