Unity urgent on nightmare banks
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.
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.