Minister for Finance Brian Lenihan has said that if there were private investment in the Irish banks, he would have to ensure that the public interest was safe.
His comments came after the Irish Bank Officials Association called on the Government to reject substantial investments in Irish banks by private equity funds, which it described as the 'real sharks and predators' of the business world.
Asked about reports of possible mergers between banks, Mr Lenihan said no discussions were before him about that at this stage. Asked if he had words of reassurance for staff in the banks and financial institutions who were worried about their future positions, Mr Lenihan said bank staff should first of all deal with their own employers, not with the Government.
As he prepares to meet the banks later this week, Mr Lenihan said a structured dialogue was in place and the core Government objective was that the banks would act as motors in the economy and ensure that necessary credit was available to keep business thriving. He also said that he had never ruled out State investment, but that this was a last resort.
Earlier, IBOA general secretary Larry Broderick raised concerns about the implications of a wave of potential mergers as the sector consolidates. He warned that if Bank of Ireland and Irish Life & Permanent were to merge, more than 3,500 jobs could be lost.
The IBOA accepts that banks need re-capitalisation - but vehemently opposes allowing private equity funds to take major stakes in them.
Mr Broderick claimed such funds aim to buy cheaply and reduce costs by cutting staff numbers and pay, squeezing customers and cutting services in order to realise as much asset value as possible. But he claimed they had no interest in the long term viability of the business or the economy.
Mr Broderick said money from the National Pensions Reserve Fund should be invested in the banks.
The Unite union, which represents 15,000 workers in the financial services sector, also condemned the potential involvement of private equity and sovereign wealth funds in Irish banks as 'undesirable, unwanted and unacceptable'.
