The Irish government has announced a 10 billion euro bail out for the country’s main financial institutions. The money will be used to boost capital in Ireland’s banks. The aim, according to the Irish finance ministry, is to ensure the long-term sustainability of banks and and help the recession-hit economy by getting credit flowing again.
The government said the investment may take the form of preference shares and/or ordinary shares. Shares in Irish banks have been hit hard by the ongoing financial turbulence and have tumbled to a fraction of their value.
In return for the cash, banks will have to improve transparency and commercial conduct. Banks are being asked to continue any negotiations with private investors, with proposals to be handed in by early January.