ANGLO AFFAIR DAMAGING, SAYS INVESTMENT BODY - The closing share price yesterday of Bank of Ireland was 40 cent, AIB's was 45 cent. The two banks, which the Finance Minister Brian Lenihan assures us are solvent and committed to recapitalising, have been further weakened by Anglo Irish Bank's nationalisation. There is talk that the Government will invest up to €1 billion more in the two banks, should they find it difficult to find cash for their recapitalisations themselves.
But apart from the weak share prices, Ireland's reputation as a place to do business and its corporate reputation in general has also been weakened.
Last night in the Seanad, Senator Shane Ross referred to the Anglo nationalisation as 'a kind of dark shadow passing over Irish corporate life'.
Frank O'Dwyer of the Irish Association of Investment Managers said the damage to the country's business reputation had undoubtedly been significant, with much coverage of the Anglo affair in reputable foreign publications.
Mr O'Dwyer said we depended on international investment, and this kind of damage was 'very unfortunate' in the current uncertain climate.
He said the nationalisation of Anglo Irish Bank was the first step in rebuilding Ireland's reputation, and the country still had many advantages, as long as there was strong regulation.
The IAIM introduced a group of institutions who were interested in investing in the banks to the Department of Finance last year. But Mr O'Dwyer said people would not put in new money unless they knew the scale of the future losses the banks faced.
