Irish government guarantees the bank debt (not the bank equity)
Government Decision to Safeguard Irish Banking System
Government Decision to Safeguard Irish Banking System
The Government has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II), with the following banks: Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society and such specific subsidiaries as may be approved by Government following consultation with the Central Bank and the Financial Regulator. It has done so following advice from the Governor of the Central Bank and the Financial Regulator about the impact of the recent international market turmoil on the Irish Banking system. The guarantee is being provided at a charge to the institutions concerned and will be subject to specific terms and conditions so that the taxpayers’ interest can be protected. The guarantee will cover all existing aforementioned facilities with these institutions and any new such facilities issued from midnight on 29 September 2008, and will expire at midnight on 28 September 2010
It will also end any funding problems the banks have and end any Irish financial crisis. My main objection to this is the taxpayer should expect a return to the risk they take but as I am not an Irish taxpayer what do I care?
Insert jokes about Dumb Irish Taxpayer in the comments.
John Hempton