Stress tests to reveal extra funds needed by Irish banks

Discussion in 'Wall St. News' started by ASusilovic, Mar 31, 2011.

  1. The Minister for Finance will propose a ground-breaking restructuring of the banks today as the results of Central Bank stress tests will signal the virtual nationalisation of the Irish banking sector.

    The results of the tests will lead Michael Noonan to undertake “a radical new approach” to fix the banks, a Government source said.

    Mr Noonan will make a “watershed” argument for a EU-wide solution around passing bank losses on to bondholders in response to the tests on Bank of Ireland, AIB, Irish Life and Permanent and EBS building society. Government colleagues last night described it as the first radical policy departure from the previous Fianna Fáil-led government.

    The restructuring of the sector is expected to be based around Bank of Ireland and Allied Irish Banks with smallers lenders such as Irish Life and Permanent and EBS merged into them to create stronger entities.

    It is understood the Minister will merge AIB into EBS as part of the restructuring programme.

    He is also understood to be considering the possibility of moving Permanent TSB into Bank of Ireland. However, this would be more complicated as the Government has no ownership as yet in Irish Life and Permanent and only 36 per cent of Bank of Ireland is State owned.

    Hum, even more funds needed??? Ouch.
  2. Yeahbut, but it's LESS than the 35B Euro IRL bailout fund. Rally time!