The Government announced plans on Sunday to recapitalise the country's three biggest banks. A total of 5.5bn euro will be injected into the Allied Irish Bank, the Bank of Ireland and the Anglo Irish Bank in return for shares. Anglo Irish will receive 1.5bn euro in return for 75% shares with an annual fixed dividend to government of 10%. This means the bank is effectively being nationalised. The Government will give 2bn euro each to Bank of Ireland and Allied Irish Bank for an annual dividend of 8%. They will also receive 25% voting rights on their respective boards.There have been widespread calls for the scheme to be dependent on changes to the management of the banks. However, Taoiseach Brian Cowen said that would not be a precondition.
Morgan Kelly, Professor of Economics, UCD, wrote an excellent critical appraisal of the government's recapitalisation of Anglo Irish in Tuesday's Irish Times. You can read it here.
On Tuesday evening, NUIG economist, Dr Alan Ahearne, was interviewed on RTE's Drivetime Show and he gave his view of the Anglo Irish recapitalisation. He asks if the markets think Anglo Irish is unsaveable why is our government putting money into it? You can listen to the 9 minute interview with Mary Wilson here.
On Tuesday evening, NUIG economist, Dr Alan Ahearne, was interviewed on RTE's Drivetime Show and he gave his view of the Anglo Irish recapitalisation. He asks if the markets think Anglo Irish is unsaveable why is our government putting money into it? You can listen to the 9 minute interview with Mary Wilson here.
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