Deirdre O'Shaughnessy talks to Paul Giblin, Head of Alternate Investments at Davy Private Clients, about the recent dramatic changes in the stock markets and where shareholders should be looking for opportunities.

With dramatic ups and downs in the Irish and international markets over the past number of weeks, everyone with a stake in the Irish economy - that is, everyone - is watching what will come next and wondering how to cushion the landing for their finances.

Davy is one of the country's best known stock broking firms and has weathered previous storms in the Irish market with success.

Last week's unprecedented move by the Government to act as guarantor for the Irish banking system in order to shore up confidence was a gamble. But, the majority of financial commentators - largely those whose livelihoods most depend on the system's survival - have enthusiastically welcomed this decision.

Like many other financial services companies, it seems Davy breathed a sigh of relief last Tuesday when Finance Minister Brian Lenihan announced unprecedented emergency measures to tackle the liquidity crisis.

According to Giblin: "There is a fine line between success and failure in these fast markets. Ireland had its credit rating re-affirmed after its pre-emptive measure to take the liquidity risk off the table for Irish banks. Yet in Iceland, failure to act was costly: the government's takeover of the third-largest bank after its funding dried up caused a downgrade in its sovereign rating. "Crucially, the pre-emptive move helps instil confidence in two separate spheres. Clearly, those providing funding to Irish banks know that the Irish government is an explicit backstop and, secondly, depositors will have the comfort of such safeguards."

The measure has provided confidence to both Irish business and financial customers, and, he says, should help by preventing a further precautionary rise in savings and a rush to so-called safe havens like cash and bonds.

"The negative wealth effect has caused a rise in the Irish savings ratio in 2008, augmented the slowdown in real income growth this year and hurt consumer spending. This bill will prevent that trend becoming any worse, and a further boost is possible if consumer and business interest rates stop rising," argues Giblin.

For those who might be worried about seeing their savings disappear, it is perhaps comforting that Davy has seen increased activity on the domestic stock market in the past number of weeks. According to Giblin, volumes have been "well above the average" over the previous 12 months.

"We are seeing increased two-way flow (buyers and sellers) in the market for bank shares with those investors seeking to pick up stock at lower levels being particularly active."

Risks have largely been removed for shareholders in Irish banks and been moved onto the State's books, to the anger of many who see the banking crisis as the result of poor regulation and sharp practise.