Irish govt to take control of banks?

30 March 2011

The Irish government may need to take controlling stakes in the last of the country's biggest lenders to help them escape state control, it has been claimed.

Bloomberg reports that following tomorrow's (31st March) stress tests, Bank of Ireland and Irish Life & Permanent will learn whether or not they will avoid joining four of the nation's largest banks in majority state ownership.

Head of research at Dublin-based Dolmen Securities Oliver Gilvarry said: "They've clearly got most to lose ... It's difficult to see how either will end up less than 50 per cent owned by taxpayers."

After injecting €46.3 billion into the industry over the last 24 months, the government has assumed control of Allied Irish Banks, Irish Nationwide Building Society, Anglo Irish Bank and EBS Building Society.

Ireland's agriculture minister Simon Coveney recently suggested that senior bondholders in the country could be set to share the bank burden as part of a final solution for the financial system's debt problems.

By Tony Aynsley

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