Ireland to Pay 54 Bln Euros For "Bad Bank"

Ireland will spend 54 billion euros (48.2 billion pounds) on resuscitating its financial system and economy after a devastating property crash, ramping up its national debt and likely paving the way for further capital injections into lenders.

Finance Minister Brian Lenihan told parliament on Wednesday that lenders would receive securities equivalent to nearly 30 percent of Ireland's Gross Domestic Product in return for transferring property loans with a nominal value of 77 billion euros to a state-run "bad bank."

A discount of 30 percent on loans written during the go-go years of the "Celtic Tiger" economy will require lenders, including Bank of Ireland and Allied Irish Banks, to raise more capital to fund the shortfall.

Read Full Article from New York Times

- Posted: 2009-09-16 12:26:02

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