AIB WILL STILL NEED MORE MONEY - The National Pensions Reserve Fund is set to be tapped for €3.7 billion later today to bring about the effective nationalisation of AIB.
It is AIB's second round of taxpayer cash, having received €3.5 billion last year. AIB needs to raise money to shore up its balance sheet after massive and mounting loan losses.
Brian Lucey, from Trinity College's business school, says the move will leave AIB 100% State-owned, if the money goes in as ordinary shares.
He says it will only fill the hole left by the latest transfer of AIB loans to the National Asset Management Agency, and the bank will need more money next year.
Professor Lucey says the Government could have used the new banking Bill to impose losses on AIB's subordinated bondholders, describing the latest move as 'kicking the can' further.
He said 2011 would see more losses in the banks, which would have to be shored up, and the banking sector would continue to act as a 'dragging anchor' on the economy.
***
CURRENCIES - The euro is trading at $1.31 and 85p sterling.
