AIB Bank Ireland Now Owned By The Taxpayer
The news gets worse with each passing day.
On the 31st of March 2011 the Irish Central Bank published crucial stress tests on the Irish banks, which show that €24bn of capital will need to be raised by the banks to help them cope with potential losses.
The figures are only appropriate in an 'adverse and unlikely' situation, according to Central Bank Governor Professor Patrick Honohan.
Mr Honohan said:
There would be majority state ownership in all banks.
This had proven to be one of the costliest banking crises in history.
If the stresses predicted are realised, the total loss during the banking crisis will be in excess of €100bn.
The measures outlined did 'not score highly on fairness.
Ireland is effectively starting from scratch on banking.
30th. September 2010
The government has bailed out Allied Irish Banks because of fears its failure would "bring down" the country.
"The state will become a majority stakeholder in this bank," Finance Minister Brian Lenihan said.
"The bank is unable to attract private capital."
Mr Lenihan said the bail out was necessary because of the bank's sheer size in comparison to the economy could "bring down" the country.
"Because of its size relative to the national balance sheet... no country could contemplate the failure of such an institution," he said.
The banking crisis in Ireland began in September 2008 when the Government issued a blanket guarantee for all deposits, provoking fury from other European Union countries whose guarantees were capped. Anglo Irish Bank was the first to attract real concern when, in December 2008, it revealed that Sean FitzPatrick, its former chief executive, had hidden loans of up to €122 million over eight years. Anglo was nationalised a month later. By February, Dublin was injecting €3.5 billion apiece into AIB and Bank of Ireland in return for preference shares. In April it set up the National Asset Management Agency to relieve banks of their toxic assets.