The Government will raise €1bn over the next two years from its bank guarantee scheme, details of which were published this evening.
As part of the scheme, the Government will appoint no more than two directors, representing tax payers interests, to the boards of each bank and building society who take advantage of the guarantees.
The Government-appointed directors will be taken from a panel approved by the Minister for Finance, Brian Lenihan.
A new committee is to be established to oversee the allocation of bonuses and pay for directors and senior executives and all bonuses will be tied to reduced risk and long term bank sustainability.
The Minister for Finance, in consultation with the Central Bank will also be able to halt the dividends individual banks pay to their shareholders.
The scheme which was announced over two weeks ago guarantees all deposits and certain debts of six Irish financial institutions and five foreign banks with substantial retail involvement in the State.
Earlier this week it received clearance from EU competition commissioner Neelie Kroes.
Labour's finance spokeswoman Joan Burton said the publication of the scheme "raises as many questions as it answers".
She said the published details failed to put a monetary value on the charge to banks for the scheme and was vague on how salaries would be limited for top executives.
"The scheme gives no indication that any senior bankers will be resigning, or will be removed as was the case in the UK. Nor is there any apology forthcoming from anyone in the banking sector," she said.
Fine Gael's finance spokesman Richard Bruton welcomed the publication of the scheme and the decision to appoint State observers to the Risk Assessment Committee of the banks. However, he said he had some concerns, including worries over the level of charges, a lack of clarity over the mandate of the public interest director on each bank's board, and the absence of public parliamentary scrutiny to oversee the operation of the scheme on behalf of the taxpayer.
"The charges are surprisingly low, being based on an estimate of the higher cost of borrowing for the State rather than the reduced cost to the banks," he said. "There is no explanation as to why subordinated debt holders who knew the risks and got very high returns in exchange were included in the scheme."
