The government is finalizing its coordinated announcement with the Financial Regulator and the National Treasury Management Agency (NTMA) about taking major stakes in two of Ireland's biggest banks.
Irish taxpayers are set to take up a 40 per cent stake in the Bank of Ireland and up to a 70 per cent stake in Allied Irish Bank. This action will effectively nationalize Ireland's two largest banks.
It is likely that the state will also nationalize the mutual bank EBS and Irish Nationwide.
Nationalizing the AIB, Bank of Ireland, EBS, Anglo Irish Bank, and Irish Nationwide will cost the taxpayer $21.5billion.
Last year the Irish state recapitalized Irish banks for $15billion and now has a 16% stake in Bank of Ireland and a 25% stake in AIB and fully owns Anglo Irish bank.
Recapitalizing the banks will allow the state to exert more control over the banks. Green party Minister Eamon Ryan said the banks would be in a "strong" position to end their uncertainty in the international market.
NAMA was due to release the details of their first discounted loans today. However NAMA has decided to announce the details tomorrow when the Finance Minister Brian Lenihan will release details about the probable nationalizing of three other banks.
NAMA will release a statement detailing the discount applied to the first series of loans from the banks. The financial regulator will then release a statement detailing the capital threshold of Ireland's financial institutions.
The Finance Minister will then tell parliament how much capital the banks will need over the next five years and how much of a stake the government will take in these institutions.
The government will apply a "once-and-for-all" solution for all banks.
The Bank of Ireland is looking for a 35% discount on loans it is transferring to NAMA whilst AIB is seeking a discount of more than 40% and Irish Nationwide 60 per cent
NAMA was established by the government to buy toxic loans from debt-ridden banks.
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