BOE calls for break-up of Ulster Bank's parent
The Governor of the Bank of England says Ulster Bank parent RBS should be broken up and called for the British government to take a more direct hand in running the largely state-owned lender.
The comments from the UK's most senior banking official will be closely watched here.
That is in part because Ulster Bank is owned by RBS, and any move to 'firesale' bad loans could flood the property market here.
The comments could also raise questions about the Irish Government's insistence that our state-owned banks have to be run at arm's length, and that ministers are powerless to stop interest-rate hikes for mortgages or force banks to lend to business.
In London, Bank of England Governor Mervyn King said it was "nonsense" that the British government did not have more direct control of RBS when it owned 82pc of shares.
"The whole idea of a bank being 82pc owned by the taxpayer, run at arm's length from the government, is a nonsense," Mr King told a committee of British MPs.
He said RBS must be restructured, including selling bad assets still on its books and building up new capital in order to be able to boost lending.
Any such move will have ramifications here.
RBS owns Ulster Bank and has had to write off €13bn from the value of its Irish loans since the start of the financial crisis.
The Irish unit has hoovered up billions in support from UK taxpayers' RBS to cope with the losses.
Property lending in Ireland has been called the "worst of all" of its poor decisions by the bank itself. Mr King added it should not take more than a year to a carry out a much more decisive restructuring of RBS and the hit to public finances of such a move was a price which had to be paid.
That would mean a firesale of bad assets, including putting over €5bn of Irish property loans up for sale, potentially flooding the market just as the likes of NAMA are looking to drip feed their assets into the market.
Shares in RBS fell after Mr King's comments and were trading at 313 pence, up 0.2pc on the day.