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December 15, 2008    

Irish Government in €10 billion bailout for country’s largest banks

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by Kay Murchie

The Irish Government is to make available a fund of €10 billion (£9 billion) to recapitalise its largest banks in a bid to ensure the long-term sustainability of the banking sector in Ireland.

The money will be available to AIB, Anglo-Irish, Irish Nationwide, Irish Life & Permanent and Bank of Ireland, which owns the Bristol & West bank.

Following the news, shares in the Bank of Ireland jumped 22%, while Allied Irish Bank gained 7% in early trading

Minister for finance, Brian Lenihan, said that some financial institutions are so embedded in our economy, in terms of their borrowing and in terms of their deposits, that they are of systemic importance to our economy.

It is very important that our banking system is seen to sustain our economy and support our economy, added Mr Lenihan.

The news came as the President of the European Central Bank, Jean-Claude Trichet, said he was concerned that some countries were breaking fiscal rules with their emergency rescue packages and would be undermining economic confidence.

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Tags: €10bn, , , , , Irish Government