Anglo Irish Bank chief executive Mike Aynsley believes the banking system in Ireland remains broken and will not be fixed until proper leadership is in place in the banks.

Speaking at a lunch for Chartered Accountants in Dublin, he said good, reputable bankers needed to be part of repairing the banking sector.

On the Government's two pillar bank strategy, Mr Aynsley said the concentration would be too high and more alternative banks were needed.

Mr Aynsley also responded to reports that Finance Minister Michael Noonan is seeking to avoid paying back the full amount of Anglo's senior debt - saying that such a move would have to be consensual and agreed with the Europeans.

Anglo redundancy package below industry norms

Staff at Anglo Irish Bank have been offered a redundancy package well below financial sector industry norms.

The Anglo offer presented on Monday is four weeks pay per year of service, inclusive of statutory redundancy entitlements.

The total amount is capped at €175,000 per employee - with 130 redundancies being sought in the first round.

Traditionally, redundancy offers in financial services were around six weeks per year of service plus statutory redundancy.

The Department of Finance said it is aware of the conditions of the redundancy package and "has raised no objection to those conditions".

The details were first published in the journal 'Industrial Relations News'.

The Irish Bank Officials Association, which was only recently recognised at the bank, has voiced disappointment with the terms.

General Secretary Larry Broderick said the offer was well below industry norms, particularly given that Anglo staff were effectively being made compulsorily redundant.

He said the issue may have to go to a third party for mediation.

Redundancy programmes at a number of other financial institutions have been on hold pending indications of what level of payment the Department of Finance is prepared to sanction at Anglo Irish Bank.