It has been announced that Anglo Irish Bank will be split in two; one part to be sold and the other to be wound down.

The Irish government and the bank have announced that it will be split into a "Funding Bank" and an "Asset Recovery Bank". A statement from the Ministry for Finance said "It is intended that in due course the Recovery Bank will be sold in whole or in part or that its assets will be run off over a period of time.”

Mike Aynsley, the bank's CEO, has said that this new clarity from the government will aid in stemming the decline in deposits. In the first half of 2010 customer deposits with the bank fell by $5.1 billion. Standard & Poor's have also said that the Irish state would need to inject $44.5 million into the bank.

By October the Irish Central Bank will determine how much capital will be needed by the banks, when it is split in two.

Chief Financial Officer of Anglo, Maarten van Eden, said that concerns about the banks outflows had caused "material" outflows over the last couple of days.

The former Anglo Irish BankGoogle Images