Wednesday 7 December 2016

Unity urgent on nightmare banks

Published 09/02/2011 | 05:00

When Alan Dukes speaks about the banking crisis, there is every reason to listen. Not only is he a distinguished economist; he is a former minister for finance and, most importantly, he is chairman of Anglo Irish Bank. He has seen that particular can of worms from the inside.

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He said yesterday that there are more worms than in our worst nightmares. There could be a further €20bn to €40bn losses in the banking system, beyond those already covered, while €75bn in loans will be needed to fund a second NAMA for smaller loans.

This stark warning came on a day of remarkable developments in this horrendously complicated, but vital, debate. Finance Minister Brian Lenihan confirmed what appeared to be a throwaway remark on RTE's Frontline, saying that he had proposed negotiations on a reduced payment for the €20bn in unguaranteed bank bonds -- a "haircut" -- but that this had been rejected by the European Central Bank.

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