Irish banks 'could be nationalised'

24 November 2010

The Irish government could be poised to take a controlling stake in two of the country's largest banks as a result of the ongoing banking crisis, it has been suggested.

As part of the EU and International Monetary Fund's €75 billion ($113.8 billion) bailout package, Taoiseach Brian Cowen's administration is poised to see Irish financial institutions' level of core tier one capital boosted to 12 per cent.

The government is expected to provide the required funding for the initiative by pumping cash into the Bank of Ireland - already 36 per cent state-owned - and Allied Irish Bank in return for a majority holding.

Central bank governor Patrick Honohan this week expressed his support for the eventual sale of Ireland's banking system, telling reporters: "I have been an advocate for a number of years for small countries to have foreign owners for their banks."

Earlier this week, the Green Party announced plans to resign from the Irish coalition and demanded a general election be held early next year.

By Asim Shah

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