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Bank recapitalisation could hit €8bn
02.02.2009
Categories:
Leadership
Tags:
Bank of Ireland,
AIB,
It is being reported that the Government will look to approve a recapialisation of AIB and Bank of Ireland of up to €8bn at their cabinet meeting tomorrow.
The original figure announced back in December was €2bn, but it is believed that the banks have had trouble raising further monies on the open market.
The Irish Times cites sources in the Department of Finance as saying that the full details of the recapitalisation scheme will be announced publicly either tomorrow evening or on Wednesday, after the markets have closed.
The deal us exected to include both an enhanced injection of funds and an insurance scheme whereby the State will underwrite the banks against potential losses on bad property debts. The Times says the Government wants the larger scheme to go ahead so as to avoid a situation whereby the emergence of bad debts in the future would require a further injection of State equity.
The insurance scheme would cover outstanding loans on development land on part-completed projects. The banks will write off a portion of the bad debts on these speculative property loans, with the State insuring the balance, says the Times.
Categories:
Leadership
Tags:
Bank of Ireland,
AIB,