Endgame for Irish banks

Ireland's banks were given a clear message tonight that the Government regards consolidation of the country's six Irish banks as key to their long term stability due to the current banking crisis. The Minister for Finance, Brian Lenihan, is meeting with the country's senior bankers at Farmleigh House, in Co.Dublin. Speculation is now rife that we could end up with AIB and Bank of Ireland totally dominating the banking scene. Since the State's guarantee for banks the Finance Minister has the power to force mergers between financial institutions. Various mergers have already been touted such as Bank of Ireland taking over Anglo Irish and Irish Life & Permanent. AIB would take control of the EBS and Irish Nationwide.

The PriceWaterhouseCoopers report in to the banks, is understood to have recommended Bank of Ireland takeover Anglo Irish while AIB would assume control of Irish Life & Permanent, in what would be the biggest overhaul of the banking sector in nearly 50 years. The expectation is that a major wave of consolidation would also have to be linked with fresh capital for the banks. But there is still no clear picture of how a final deal would be put together or how long it will take.