Irish banks may get bailout cash in days – report

Extra cash could be pumped into Ireland’s ailing banks as soon as this weekend, the Irish Independent reported on Wednesday, as the state is set to take control of all banks as part of a massive international bailout.

The European Union and International Monetary Fund (IMF) have agreed a bailout of Ireland to shore up its banks. The loan is expected to be up to 85 billion euros ($114 billion).

Ireland could impose a levy on banks as a term of the bailout and to ease a deadlock over the country’s low corporation tax, The Irish Times reported.

Irish officials have said they want to overcapitalize banks and were expected to require they hold a core Tier 1 capital ratio of about 12 percent, giving them a bigger cushion than most international rivals to withstand future shocks.

A plunge in the share prices of Ireland’s top two banks this week meant pumping in the necessary capital was likely to mean the government could fully nationalize Allied Irish Banks and take a majority stake in Bank of Ireland.

While some of the bailout loans could be used to immediately recapitalize the banks, most of the funds were seen as a backstop in case they need capital and to ease funding strains, officials have said.

AIB could be told to restart a sale of its British business, after halting the process last week when failing to find a buyer.

The banking crisis has rocked Ireland and stretched its finances. The deeply unpopular government was due to explain on Wednesday how it planned to save 15 billion euros over the next four years. The IMF and EU bailout depends on the austerity plan and a later budget going through.
Source: Reuters

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