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Ireland poised to launch bank rescue plan – report

  The Irish government is on the brink of launching a multi-billion euro rescue plan for the country’s banks, including an injection of taxpayers’ money, the Irish Independent newspaper reported on Wednesday.

 

Spokesmen at the finance ministry were not immediately available to comment. “It is understood the government has now accepted that it will have to put public money into the banks,” the Irish Independent said.

The paper said Finance Minister Brian Lenihan had a number of options to recapitalize banks, including buying ordinary shares, preference shares or co-investing with private money. “Market sources believe the state would prefer to buy preference shares, as this would allow it to take an annual dividend, even as banks scrap a payout to ordinary shareholders over the lifetime of the guarantee scheme,” the paper said.

Prime Minister Brian Cowen said on Tuesday the government was looking into the capital ratios of banks and their business plans, repeating that it did not rule out recapitalization as an option. “The idea that recapitalization on its own provides the means by which increased access to lines of credit are available to business is not a comprehensive picture,” Cowen said on Tuesday.

In another report, the Irish Times said the government was in discussions with a number of international investors including several private equity firms about injecting fresh capital into Irish banks following deep falls in their shares. (Reuters)