Lifeline for Irish banks' employees
The government's plans to safeguard all deposits, covered bonds and senior debt within Irish banks will undoubtedly be a welcome relief for customers, but the news will also reassure the firms' employees that their jobs are on a safer footing.
With the current problems plaguing domestic institutions, rumours are rife that potential redundancies are on the horizon. Both Bank of Ireland and Allied Irish Bank (AIB) have assured us that there are no plans for job cuts and that they continue to recruit, albeit at a slower rate than during the past year.
In August, AIB revealed that headcount had shrunk by 600, as it adopted a policy of not replacing departing staff and redeploying existing employees to carry out work undertaken by 300 external contractors.
The government's move means up to €400bn of liabilities are guaranteed for up to two years in six banks - Allied Irish, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, Irish Nationwide Building Society and the Educational Building Society.
Finance minister Brian Lenihan said yesterday: "Every bank, every worker, everyone knows how short those funds have been in the last year. If they dry up entirely, then that is very serious for Ireland. We must take action to secure the stability of our banking system and that is what the government decided to do."
Michael Fingleton, chief executive of the Irish Nationwide Building Society, said he accepted the move could give Irish banks a competitive advantage over their UK rivals, who are unlikely to see a similar bailout.
But it seems that it's not looking any less frosty on the recruitment front.
An AIB spokesperson tells us: "There is no recruitment freeze. We will be replacing staff as required, but will try to redeploy staff internally to fill the roles we would otherwise have recruited externally for."
Bank of Ireland tells us that recruitment has slowed: "There's no volume recruiting going on and we're unlikely to see any significant increase in headcount within any division."
