BRUSSELS (MNI) – Ireland’s Finance Minister Brian Lenihan will ask
the European Union to allow troubled bank Anglo Irish Bank to be wound
down over 10 years, the Irish Independent reported on Monday, without
saying who its sources were.
Fears about the impact of the troubled lender — which has already
cost taxpayers E25 billion — on the Irish economy have been mounting,
contributing to record high Irish bond spreads over the benchmark German
Bund at the end of last month. Spread levels were unchanged on Monday
morning at +354 basis points.
The newspaper reported that Lenihan will meet EU Competition chief
Joaquin Almunia in Brussels on Monday, bringing weeks of talks about the
bank — dubbed “the worst bank in the world” by the Irish press — to a
head.
“The minister’s plans for a wind-up of its operations will include
a guarantee for all deposits held with the bank, regardless of their
size,” the Irish Independent report said.
“Sources were unable to put an estimate on the cost of a 10-year
wind-down, saying it depended on numerous factors such as interest rates
and the state of the property market,” the paper added.
It said Lenihan was hoping for a decision on the 10-year plan
within the next two weeks.
Ministers had been backing plans to split the bank up and keep the
“good” part operational, but they have become disillusioned with the
spiralling cost of the rescue plans.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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