Irish government primed for €5bn bank bail out

by Gill Montia

Story link: Irish government primed for €5bn bank bail out

The Irish government is about to throw a €5 billion lifeline to its three biggest banks, according to reports in the press.

Unnamed sources have informed Dublin’s Sunday Business Post and the Irish edition of The Sunday Times that the troubled Anglo Irish Bank could become 80% state owned.

The two other banks named as in need of urgent assistance are Allied Irish Bank and Bank of Ireland.

According to The Sunday Times, the injection of cash will be accompanied by share issues to existing investors, which the Irish government will underwrite and could therefore increase its level of investment to €7 billion.

Last week, the chairman of Anglo Irish Bank resigned.

Shares in the bank plummeted as it emerged that Sean Fitzpatrick had temporarily transferred loans of €87 million with Anglo Irish Bank to another bank, before the group’s financial year end.

Mr Fitzpatrick claims the loans were made to him on a commercial basis and while the bank is adamant that its chairman did not breach banking or legal regulations, it has admitted he has acted inappropriately.

Similar transfers have apparently occurred over the past eight years, meaning that the loans did not appear in the group’s annual accounts during the period.