Anglo may need further €8bn
Taoiseach Brian Cowen has said that Anglo Irish Bank may need a further €8bn capital injection to stay afloat.
About €14.3bn has already been pledged to the bank, Cowen told the Dail. Further capital may be needed this year, he said, in a plan laid out by Finance Minister Brian Lenihan in March.
The final costs of the Anglo Irish bailout can’t be quantified until the scale of the bank’s losses and its future plans are determined, Cowen said. The government seized control of the lender in January 2009 after bad debts surged in the wake of the collapse of the property market. Real-estate prices have fallen by about half since 2007.
“Let’s recall Lehman Brothers was a much smaller bank in the U.S. system than this bank was in the Irish system,” Cowen said. “We know the consequences when that bank was let go to the wall.”
Anglo Irish executives are proposing splitting the bank into two, Cowen said. An asset management unit would run down some of the bank’s loans, while a remaining “viable” section may “eventually” may be sold to recoup some of the taxpayers’ money, he said.