ECB plans €60 billion emergency lending to Irish banks

The European Central Bank (ECB) will provide Irish banks with more than €60 billion in emergency funding in a new plan to boost support for Ireland's ailing financial system.

The new scheme, which is being prepared ahead of the results of bank stress tests due next Thursday, will provide banks with "liquidity" loans for the medium term, throwing a lifeline to Ireland's ailing banks.

The six major banks in Ireland, including Bank of Ireland, Allied Irish Banks, Irish Life & Permanent and EBS Building Society, are estimated to have already accumulated outstanding loans of around €150 billion (879 million pounds) from the ECB and Ireland's own central bank as of end-February.

Under the earlier bailout plans, the ECB and the Irish central bank had together made available around €70 billion to Irish banks.

This, however, failed to resolve Ireland's banking crisis and with further outflows of deposits and a drying up of inter-bank loans, Irish banks are now solely dependent on the central bank for their day-to-day operations.

The new plan, expected to be announced next week following announcement of the results of the stress tests, will replace the earlier Emergency Liquidity Assistance (ELA) window being operated by the Irish central bank.