FRANKFURT (MNI) – Irish Finance Minister Michael Noonan will make a
“watershed” argument for an EU-wide solution to push bank losses onto
bondholders following publication of the results of bank stress tests in
Ireland later today, the Irish Times reported Thursday, citing a
government source.
As a result of the tests, Noonan will undertake a “radical new
approach” to fixing the banks, the source said. He is scheduled to
address Ireland’s parliament shortly after the stress test results are
revealed.
The tests are likely to show that banks will need an additional E18
to E23 billion, which would then drive the cost of bailing them out to
considerably above E60 billion, the paper said.
Among individual banks, the paper said Irish Life and Permanent
will need about E3 billion in new capital to deal with a worst-case
scenario in mortage losses.
The embattled Bank of Ireland would need about E4-E5 billion under
the tests, the paper said. The test results will also likely push Irish
Life and Permanent and Bank of Ireland into majority government control.
Noonan will also seek to merge the bank AIB (Allied Irish Banks)
into EBS (Educational Building Society) and also to shift Permanent TSB
into Bank of Ireland.
This differs slightly with a report published earlier today in the
Irish Independent. They said that the government is expected to force
the EBS into AIB.
[TOPICS: M$$EC$,M$X$$$,MT$$$$,MGX$$$,M$$FX$]
