In an unprecedented move yesterday, Ulster Bank asked Irish Finance Minister Brian Lenihan to include it in the controversial scheme whereby the Dublin government will guarantee all deposits in Irish banks should one of them go bankrupt.

But last night Northern Bank ruled out asking to be underwritten by Irish taxpayers and said that it was in a better financial position than many banks covered by the scheme.

And, as dramatic new figures revealed that Ulster house prices are collapsing by £250 a day, First Minister Peter Robinson last night told an audience of bankers that falling house prices should be welcomed.

The former finance minister said that young people would be more able to get on the property ladder as falling prices would make it more affordable for people to own a home.

“Having average house prices at 10 times the average salary is unsound and unsustainable,” he told the Institute of Bankers.

“In the long term lower housing costs should actually benefit our economy.”

Yesterday the Ulster Bank – a subsidiary of the Royal Bank of Scotland – said it was confident of being admitted to the Irish guarantee scheme following the decision by the Dail yesterday to approve the legislation underwriting savers’ deposits.

Irish ministers had said they may extend the scheme to foreign banks which have a significant number of Irish customers on a case-by-case basis. Turn to page 5