Bondholders 'could share bank burden' in Ireland

28 March 2011

Senior bondholders in Ireland could be about to share the country's bank burden, agriculture minister Simon Coveney has suggested.

The move is being touted as part of a final solution for the nation's debt-ridden financial system and finance minister Michael Noonan is looking for agreement from European authorities in order to strike a deal bondholders.

Speaking to RTE, Mr Coveney said the strategy is to be considered after stress test results reveal how much extra capital the banks need, adding the government wants "a sustainable and comprehensive solution that involves recapitalization, but also an element of burden sharing as well as a funding package for Irish banks".

The politician observed that a number of "difficult discussions" will need to take place over the coming two or three weeks in order to put the idea into practice.

Bloomberg recently reported that Irish banks will need an additional €27.5 billion ($39 billion) of aid from the country's government to help ease the crisis.

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