The Irish government is moving to shore up the country’s banks with a major programme to pump in money.
The finance minister in Dublin said some or all of the government’s preferential shares in Allied Irish will be converted in Allied Irish Banks, and it could become the majority shareholder. But it will remain a minority shareholder in the Bank of Ireland.
Brian Lenihan said: “The Irish state has established its own credibility as a state that can manage its own finances. There is a huge international recognition of that now. We need to translate all that international confidence into the banking sector as well, and sort it out once and for all.”
And the National Asset Management Agency — Ireland’s so-called ‘bad bank’ — will buy its first tranche of bad debt nominally worth 16-billion euros from five banks and building societies. But it will pay just 8.5-billion, that is a discount of 47 per cent.