Irish Banks Need $43 Billion in Capital as "Worst Fears Have Been Surpassed”

03-31-2010 • GlobalEconomicAnalysis.blogspot.com

Ireland’s banks need $43 billion in new capital after “appalling” lending decisions left the country’s financial system on the brink of collapse. “Our worst fears have been surpassed,” Finance Minister Brian Lenihan said in the parliament in Dublin yesterday. “Irish banking made appalling lending decisions that will cost the taxpayer dearly for years to come.” The agency aims to cleanse banks of toxic loans, the legacy of plunging real-estate prices and the country’s deepest ever recession. In all, it will buy loans with a book value of 80 billion euros ($107 billion), about half the size of the economy. “The information that has emerged from the banks in the course of the NAMA process is truly shocking,” Lenihan said.