Wind up toxic bank, urges Conor Lenihan
Scandal-ridden Anglo Irish Bank should be "decommissioned" as soon as possible, a government minister told the Irish Independent yesterday.
Although Innovation Minister Conor Lenihan would not be drawn on a timeframe for a wind-down of the now state-owned bank, the comments are further evidence that the Government is moving away from a 'good bank/bad bank' solution for the institution.
"It has to be decommissioned, it will be decommissioned -- fairly swiftly in terms of the actual decision being made in a few weeks with the permission of Europe," he said.
This newspaper reported earlier in the week that the Government now favours a gradual wind-down of the bank rather than the so-called 'good bank/bad bank' proposed by Anglo's management.
Mr Lenihan added: "There are an awful lot of people fixating on Anglo because it has cost a large amount of money and there was a lot of reckless and irresponsible lending from that bank that has affected other institutions."
Mr Lenihan, a brother of Finance Minister Brian Lenihan, also admitted that the cost to the taxpayer could be higher than the €23bn already committed to the bank.
"It could be more than that but I'm not going to get into sticking a plaster on the figure but there has to be an orderly wind-down. But it would be costly and dangerous to wind it down quickly."
Yesterday, Taoiseach Brian Cowen also said that an immediate shutdown would be too costly. "The idea that it could be wound up with us having to come up with up-front costs of winding up to the tune of €70bn -- or further billions -- clearly would not be in the interest of the taxpayer."
He added that the issue would be finalised as soon as discussions with the European Union were completed.
Earlier this week, the bank posted losses of €8.2bn for the first half of 2010, claiming it was still battling through an exceptionally difficult period.
Anglo officials expect further losses as more assets are shifted off the bank's books.
"The new management of Anglo is working to significantly restructure the bank's balance sheet, risk profile and culture in order to restore viability," the bank said.
A breakdown of the six monthly returns showed it transferred €10bn of assets to NAMA, which was set up to try to clean up the troubled loan books of Irish lenders.