The Government is still some way from signing off on its multi-billion euro recapitalisation scheme for AIB and Bank of Ireland, Minister for Finance Brian Lenihan said tonight.
Speaking on RTÉ's
The Week In Politicsprogramme this evening Mr Lenihan suggested that a reduction in banking executives pay was among the issues to be resolved before the Government would proceed with the scheme.
"There's some tough talking to take place still. The deal is not finalised," said Mr Lenihan.
"Clearly the Government wants certain clear commitments from the banks in relation to lending to small enterprises, in relation to repossession and securing people who are facing the threat of repossession and in relation to the whole area of salaries, bonuses an renumeration. We want to see dramatic reductions in these," he said.
The Minister's comments come after reports today indicated that both AIB and Bank of Ireland have told the Government they are unable to end the payment of bonuses to executives due to contractual reasons.
They also coincide with growing anger in Britain following news that the Royal Bank of Scotland (RBS) is about to award its staff £1 billion in bonuses, shortly after it received a £20 billion government bail-out to stay afloat.
Earlier today, Minister for the Environment John Gormley said he believed executives at Irish banks should have their pay slashed.
Minister Gormley said that he believed the issue of executive pay was something that would have to be addressed during the recapitalisation talks.
"I believe that the Government position will be that executive pay has to be slashed substantially," said Mr Gormley.
Meanwhile, Fine Gael today demanded to see the loan books of Bank of Ireland and AIB before it backs the Government's latest recapitalisation plan.
Party leader Enda Kenny warned that taxpayers' money must not be used to bail out reckless speculators and he reiterated calls for the pay and bonuses of bankers to be cut.
Mr Kenny said: "Any recapitalisation plan must get credit flowing to Irish business and guarantee that Irish taxpayers are not bailing out international financial speculators who funded reckless lending by banks.
"If this type of guarantee cannot be given then another formula for recapitalising Irish banking must be explored."
The Fine Gael leader called for an urgent meeting with the Taoiseach, the governor of the Central Bank and the acting Financial Regulator, before the Government pours billions of euros of scarce taxpayers' money in to a pit that we don't know the depth of."
Mr Kenny wants to know the current liquidity level in each bank and the scale of potential bad loans.
"This is the type of essential information that Fine Gael will need to have before backing the Government's bank recapitalisation plan," he added.
The Taoiseach said yesterday that the recapitalisation plan with Bank of Ireland and AIB will be finalised in coming days.
It will stimulate banking activity and revitalise the economy, he added.
Measures to protect homeowners who have difficulties meeting their mortgage repayments are also being considered, according to the Taoiseach.
Fine Gael claimed the rescue of Irish banking should not be led by the same management teams that brought the banking system to the edge of collapse.
Mr Kenny added: "If we cannot guarantee that Irish taxpayers are not simply bailing out reckless professional investors then other means of recapitalising Irish banks must be considered."
Additional reporting: PA
