Irish banks to be recapitalised
The Irish government is to provide a fund of £9bn (10bn euros) to
recapitalise all its listed banks.
The money will be available to AIB, Anglo-Irish, Irish Nationwide, Irish
Life & Permanent and Bank of Ireland, which owns the Bristol & West
bank.
However before any money is paid out, the banks must await the outcome
of the most recent rights issue.
If private investors choose not to step in, then the state will have to
provide the money instead using the fund.
Finance Minister Brian Lenihan told RTE News: "Some financial
institutions are so embedded in our economy, in terms of their borrowing
and in terms of their deposits, that they are of systemic importance to
our economy.
"It's very important that our banking system is seen to sustain our
economy and support our economy."
Bank of Ireland and AIB shares have fallen 92% and 88% respectively this
year.
Banking fears
The Irish government said the objective of making the fund available was
to ensure the long-term sustainability of the banking sector.
It pledged to secure the interests of the taxpayer through appropriate
terms and return on the investment.
The Department of Finance said the state may use money from the National
Pension Reserve Fund.
The move would help boost the flow of funds to the country's struggling
economy, it added.
BBC business correspondent Joe Lynam said that, as a proportion of its
economy and banking sector compared to the UK, the Irish bailout
represents an even bigger capital injection than Britain's.
Story from BBC NEWS:
http://news.
Published: 2008/12/14 22:36:10 GMT
Monday, 15 December 2008
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