The Bank recapitalisation deal announced tonight is a bad deal for the taxpayer. The coupon rate of 8 per cent applying to the state shares in AIB and BOI is low, compared, for example, to the UK terms.

It is very difficult to see what is the up-side for the ordinary taxpayer here. The taxpayer has already given a guarantee of 440 billion, and is now being asked to inject up to 7.5 billion in three banks.

If a low coupon rate is intended to reflect the weakened condition of the banks, the taxpayer should have been given a right to subscribe for ordinary shares at preference rates (for example, at the current share prices).

Such an arrangement would mean that when the banks recover the taxpayer would be compensated for its investment and risk. The 125 per cent buy-back price after five years does not provide the state with anything like the return it should expect.

Once again, it is clear that the banks have been in the driving seat of this process.

The fact that no senior bankers are to be removed speaks volumes.

The decision to invest in Anglo Irish Bank is highly questionable. It is by no means clear that Anglo has a viable business model, and it is not systemically important in the way the big two banks are. Before committing 1.5 billion, an inspector should be put into the bank to fid out what has been going on.

Despite the regulator having commissioned the PWC report, we are none the wiser as to the current value of the Anglo loan book or what exactly the taxpayer is buying into.

Nor do we know any more about the Fitzpatrick Affair, or what happened withMr Sean Quinn share dealings in Anglo.

Overall, this deal offers only limited reassurance that credit will flow again, little to re-assure homeowners, and no up-side to the taxpayer.