Ireland to Sanction Huge Bank Rescue Plan

The Irish government is on the brink of launching a multi-billion euro rescue plan for the country's banks as the share price of a second major institution fell below €1 yesterday, the Irish Independent reported today. Officials are going through an expert report forensically examining the loans given out by the banks to work out their levels of bad debt. The finance ministry held talks with the financial regulator and the central bank on Tuesday night, and the government has accepted that it will have to put public money into the banks. Prime Minister Brian Cowen said the government was seeking a solution to the liquidity crisis and was looking at a range of possible measures. Analysts estimate banks will need to raise between €5bn and €14bn between them to boost their capital reserves. It is likely the amount individual banks could access will reflect their current capital levels, expected loan writeoffs over the coming years and commitments they can give the state on lending to the broader economy. Read more.