Irish Minister for Finance- Brian Lenihan announced the plans for the troubled Anglo Irish Bank today.
The bank is to be split – with Anglo’s remaining loans beng housed in an “asset recovery” bank, where they will be worked out over a period of time. The Anglo Irish deposits will be put into a government-backed deposit bank which will not engage in any lending.
“It will be a stand-alone, regulated bank, completely separated from Anglo’s loan assets and it will be owned directly by the minister for finance,” said Mr. Lenihan
The capital cost of the plan — the final bill which investors have been seeking — will be known in October when the central bank announces the units’ capital requirements.
The prospect of a final price being put on the cost of bailing out Anglo, which has saddled Ireland with the worst budget deficit in the European Union, gave some relief to Irish debt spreads but analysts said overall the lack of detail was disappointing.
Alan McQaid, chief economist at Bloxham Stockbrokers was reported as saying
“I don’t think the market gives a hoot one way or the other if it’s a ‘good bank/bad bank’ or if it’s wound up, the issue is how much it’s going to cost.”