LONDON (MNI) – Irish Finance Minister Michael Noonan has today
announced a plan to ‘radically restructure’ the Irish banking system,
reducing it to an ‘appropriate size for the Irish economy.
Following the announcement of the Stress Tests by the Central Bank
of Ireland and an E24bn cash injection for four Irish banks, Noonan said
that the banks would be reorganised into core and non-core operations
over time and would reduce the ratio of assets to deposits, using the
proceeds to pay back the European Central Bank and Central Bank of
Ireland funding.
Noonan said that the plan would put the Irish banking system on a
“firm footing for the future”.
“Each of these banks will reorganise their operations into core and
non-core functions. With a carefully managed programme of deleveraging,
by 2013, as the non-core assets which do not serve growth on the island
of Ireland disappear, the ‘Pillar banks’ should start to better serve
the economy as functioning banks rather than the oversized,
overleveraged banks they now are,” Noonan said.
“Non-core businesses and assets of the banks will be sold or run
off over time, avoiding fire-sales. This will allow for a significant
reduction of the level of assets relative to deposits over time. With
these sales, recapitalisations and other measures the banks will repay
their ECB and Central Bank funding and in time will be better able to
raise their own funds,” Noonan added.
–London Bureau; Tel: +442078627492; email: ukeditorial@marketnews.com
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