Lenihan: it would have been like Iceland

Speaking at the annual dinner of the Irish Taxation Institute, Lenihan said the government's plan for economic recovery involved restoring order to the public finances, repairing the banking system and regaining competitiveness and jobs.

He defended the state guarantee to stabilize funding for the banks and the establishment of the National Assets Management Agency to clean up balance sheet. He that 100 percent nationalization of the banks was wrong as statutory state takeover would have undermined confidence and dried up funding for the institutions and the State.

Lenihan insisted that recapitalization of the banks and reform of the regulatory system were also vital components of the strategy.

He said nationalization would have involved the banks being de-listed from the stock exchange and would have made the eventual exit from state ownership difficult and expensive.

Meanwhile, and what is an illustration of the role that NAMA will play in restoring health to the Irish banking secor, Ireland's biggest bank has announced a pretax loss of almost

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