• Banks became too big for the economy
  • There will be radical restructuring of banking system
  • Two new strong banks
  • AIB and EBS to merge
  • Bank of Ireland will be second strong bank
  • Banking system remains in distress
  • Irish Life will separate banking business and unwind it; life business will be sold
  • EUR 23 bln in non-core AIB/EBS assets will be “deleveraged” by 2013
  • Banks will repay ECB loans
  • Bank of Ireland will sell EUR 30 bln of assets by 2013
  • Subordinated bond holders will be asked to “contribute”
  • Ireland continues to honor its bank guarantee
  • ECB and Irish central bank continue to show high level of commitment to Irish banks
  • Irish government committed to EU/IMF program; any adjustments won’t change overall plan

Central bank chief Honohan :

  • No imminent prospects for medium-term ECB financing.
  • Irish debt is sustainable.
  • Banks may raise some funds privately
  • Senior bondholders will not take a hit
  • No risk of cash shortage despite lack of ECB deal