Ireland offers hand to crunch-hit banks

Ireland's government has become the latest to offer support to its banks as the country's lenders seek to shore up capital depleted by the global financial crisis.

Irish Finance Minister Brian Lenihan said at the weekend that the government, through the National Pensions Reserve Fund or otherwise, may invest in its banks alongside other backers.

Lenihan, speaking after meeting executives from the country's six biggest lenders including Bank of Ireland and Allied Irish Banks, said he had not made any proposals on mergers between the lenders.

The Irish Association of Investment Managers, whose 12 members manage about £215 billion, said last week that it had approached Lenihan on behalf of a "number of investment institutions" considering injecting money into four publicly traded lenders.

The Dublin-based association has not identified the institutions.

While the government has guaranteed the deposits and borrowings of its six biggest lenders, it has so far stopped short of following other European states and investing in the banks.