The days of Anglo Irish Bank are numbered as plans for failed finance institutions outlined.
Governor of the Irish Central Bank, Patrick Honohan, has announced that Anglo Irish Bank will be wound down and guaranteed deposits will move to a separate entity. There were talks about senior bondholders incurring losses, but it was agreed that such a move would destabilise the banking system. The news comes following lengthy negotiations about the European Union and International Monetary Fund deal for the banks.
Anglo Irish will disappear as a name in the next few weeks.
Similar changes will happen at Irish Nationwide, which is also being wound down. The Central Bank plans to shrink the size of institutions which will continue to do business by selling off blocks of their loans. This all comes at a cost to the state.
The state will have to provide money to cover losses which investors could incur.
Ten billion euro has been allocated to increase the capital of the banks. Some of this will be used to mitigate risk.
Patrick Honohan insists that deposits in Irish banks are safe and this is underpinned by support from the Central Bank and the European Central Bank.
An RTÉ News report broadcast on 29 November 2010. The reporter is David Murphy.
