Anglo wind-down plan will be ready 'within weeks'
A FINAL plan for Anglo Irish Bank's wind-down is to be submitted to the European Commission "in a matter of weeks", after intense consultations between Brussels and the Department of Finance.
The news comes almost a month after the Government threw its weight behind plans to split Anglo into a savings bank -- which will retain deposits -- and an asset-recovery bank that will run down the loan book.
The approach was triggered by the European Commission's (EC) reluctance to endorse previous plans to put Anglo's troubled loans into an asset-management agency, while keeping savings and 'good' loans in a fully functioning new bank.
In the immediate aftermath of the announcement, sources in Brussels expressed concerns about the new plan, particularly the prospect of Anglo's savings bank competing with other institutions for new deposits.
It is understood that these concerns are currently being addressed in intense discussions between Anglo's management, the Department of Finance and EC officials.
Sources said a new plan was unlikely to be submitted until the Government was as good as certain that the details would be approved by the EC.
A spokesman for the Department of Finance said that while there was no exact target date for submitting Anglo's plan, the submission would be made "in a matter of weeks".
Both the department and Anglo's management are hoping to have the bank separated into 'AssetCo' and 'SavingsCo' by the end of the year. New names for both have yet to be decided.
The final plan will incorporate the Financial Regulator's recent work to estimate the bank's losses, which showed that Anglo could need a total of between €29.3bn and €34.3bn in state support.
The money will be injected over about a decade, with the final amount dependent on the performance of the loans that go into the asset-recovery bank.
The plan is also likely to detail a definitive approach to dealing with the holders of the riskiest subordinate debt.
Finance Minister Brian Lenihan confirmed last week that he was bringing forward legislation that would see the so-called 'sub-debt' holders 'share the pain' -- but details of how the pain would be spread have not yet been put forward.
If the EC approves the Anglo bailout, it will be the biggest ever bank rescue in Europe, reflecting Anglo's position as the holder of the world record for annual banking losses.