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15/12/2008
Banks Bailed Out
Around €10 billion is to be pumped into the Irish Republic's banking system by the Government in a bid to recapitalise all its listed banks.
The money will be available to AIB, Anglo-Irish, Irish Nationwide, Irish Life & Permanent and Bank of Ireland, which owns the Bristol & West Bank.
However before any money is paid out, the banks must await the outcome of the most recent rights issue.
If private investors choose not to step in, then the state will have to provide the money instead using the new fund.
Finance Minister Brian Lenihan told RTE News: "Some financial institutions are so embedded in our economy, in terms of their borrowing and in terms of their deposits, that they are of systemic importance to our economy.
"It's very important that our banking system is seen to sustain our economy and support our economy."
The move comes on foot of disastrous Stock Market dealing with Bank of Ireland and AIB shares falling 92% and 88% respectively this year.
The Irish government said the objective of making the fund available was to ensure the long-term sustainability of the banking sector.
It pledged to secure the interests of the taxpayer through appropriate terms and return on the investment.
The Department of Finance said the state may use money from the National Pension Reserve Fund.
The move would help boost the flow of funds to the country's struggling economy, it added.
This is not the first time such a move has taken place with the UK undertaking a similar, though proportionally lesser scale, operation for the main British banks earlier this year.
The move also comes on foot of earlier Irish moves to underpin the banking system.
In October, an Irish guarantee first covered six Irish-owned banks - Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent (which owns Permanent TSB), Irish Nationwide Building Society and the Educational Building Society.
Then, after lobbying, Finance Minister Brian Lenihan announced five other non-Irish institutions with major operations in the Republic would also be included, with some limitations.
See: EC Approves Bank Bail-Out
The money will be available to AIB, Anglo-Irish, Irish Nationwide, Irish Life & Permanent and Bank of Ireland, which owns the Bristol & West Bank.
However before any money is paid out, the banks must await the outcome of the most recent rights issue.
If private investors choose not to step in, then the state will have to provide the money instead using the new fund.
Finance Minister Brian Lenihan told RTE News: "Some financial institutions are so embedded in our economy, in terms of their borrowing and in terms of their deposits, that they are of systemic importance to our economy.
"It's very important that our banking system is seen to sustain our economy and support our economy."
The move comes on foot of disastrous Stock Market dealing with Bank of Ireland and AIB shares falling 92% and 88% respectively this year.
The Irish government said the objective of making the fund available was to ensure the long-term sustainability of the banking sector.
It pledged to secure the interests of the taxpayer through appropriate terms and return on the investment.
The Department of Finance said the state may use money from the National Pension Reserve Fund.
The move would help boost the flow of funds to the country's struggling economy, it added.
This is not the first time such a move has taken place with the UK undertaking a similar, though proportionally lesser scale, operation for the main British banks earlier this year.
The move also comes on foot of earlier Irish moves to underpin the banking system.
In October, an Irish guarantee first covered six Irish-owned banks - Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent (which owns Permanent TSB), Irish Nationwide Building Society and the Educational Building Society.
Then, after lobbying, Finance Minister Brian Lenihan announced five other non-Irish institutions with major operations in the Republic would also be included, with some limitations.
See: EC Approves Bank Bail-Out
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Irish Banks Get Government Lifeline
Customers of Irish banks are now having their cash 'covered' after a surprise move from the Irish government late yesterday that it will "guarantee all deposits". The high-risk move had an almost immediate positive impact on early trading today, with the ISEQ index of Irish shares opening 3.4% higher, at 3,412 points.
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'Large Irish Presence' At Cannes
The focal point for the Irish film industry at the Cannes Film Festival, the Irish Pavilion, has opened again for business this week, with over 200 of the leading lights of the Irish film industry flying out to the festival to promote and sell new Irish cinema.
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Ireland WeatherThis Evening and Tonight:Outbreaks of rain during this evening. Becoming mainly dry with clearing skies overnight with a frost possible along with a few icy patches. Some fog may form in the south. Minimum temperature 0 °C.
