In anticipation of bank stress results next Thursday, The European Central Bank (ECB) is developing an emergency plan to support Irelands' ailing financial system, according to the Irish Times.

The scheme would provide banks with more than €60 billion in medium-term “liquidity” loans and would significantly expand the reach of the ECB's operations in Ireland.

The ECB would replace a short-term funding scheme known as the Exceptional Liquidity Assistance (ELA) program with a new medium-term liquidity facility, designed specifically for the Irish banks.

The full ELA deployment of some €60 billion in short-term bank liquidity would be replaced, and the new facility would include in reserve significant additional money in case of any further deterioration in the liquidity position of the banks after the stress tests.

The plan would be directly run by the ECB governing council for the Eurosystem. The council, whose members include the governors of the 17 national central banks in the euro zone, will lay down very strict conditions over the use of the new initiative, reserving the right to withdraw the scheme if the Irish government fails to execute any element of a radical bank restructuring program.