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Irish government facing pressure to act on Anglo Irish Bank

By
DARA KELLY,
IrishCentral.com Staff Writer

Published Wednesday, September 1, 2010, 8:07 AM
Updated Wednesday, September 1, 2010, 8:16 AM

 

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Anglo Irish Bank
Anglo Irish Bank

The Irish government indicated yesterday that winding down Anglo Irish Bank could now be an option as intense political pressure mounts on Taoiseach (Prime Minister) Brian Cowen to deal with the national millstone.

Propping up Anglo Irish, which was nationalized early last year after staggering losses, left Ireland with the biggest budget deficit in the European Union last year and now with the costs continuing to climb and no final bill in sight, premium investors demanding to hold ten-year Irish bonds rather than Bunds neared record highs yesterday.

Until recently, the Irish government's preference for Anglo was to split it into so-called good and bad banks, with managers proposing the good unit took assets worth 10-15 billion Euro while the rest are split between its own bad bank and the state's broader scheme.

But opposition parties now want the lender - which was Ireland's third-biggest listed bank before it was saved from collapse by nationalisation last year - wound down slowly.

'What we are not saying is that there can be an immediate shutdown of Anglo, that is still by far the most expensive option,' Green Party chairman Dan Boyle said. 'Any orderly wind-down of a bank will take at least four or five years.'

However the Irish minister for Justice said the good bank-bad bank split and an orderly wind-down remained options in talks with Brussels. 'We haven't come down on how soon Anglo Irish should be wound down,' Dermot Ahern, the minister for justice, said.
 

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1 Comment

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Posted by Searlit on Sep 02, 2010, 11:03 AM EDT
The Irish government should put their tax-payer's money into creating more jobs. Propping up wasteful banks won't drive the economy.
 


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