Ireland may ask for bank package as bailout nears

Irish Finance Minister Brian Lenihan said the government is prepared to ask for a rescue package for its banks after talks with the European Union and International Monetary Fund conclude.

“If these talks were to result in a substantial contingency capital funding” pool that didn’t need to be drawn down, that “would be a very desirable outcome,” Lenihan said in the Irish parliament in Dublin today. He said no agreement has yet been reached.

Lenihan’s remarks are the first by a government minister to openly concede the possibility of a rescue. EU, IMF and European Central Bank officials fly into Dublin today to study the books of the country’s lenders as European policy makers put pressure on Ireland to accept a package to prevent contagion spreading through the euro area.

Earlier, central bank Governor Patrick Honohan said that the agreement may be worth “tens of billions” of euros.

“It will be a large loan because the purpose of the amount to be advanced, or to be made available, is to show Ireland has sufficient firepower to deal with any concerns of the market,” Honohan told state broadcaster RTE this morning. “We’re talking about a substantial loan.”