Anglo Irish Bank successor 'to be liquidated'

BBC News, 6 February 2013

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Anglo Irish Bank, along with most of the
 Irish banking sector, collapsed after the
2008 financial crisis

Failed bank IBRC, formerly Anglo Irish, is to be liquidated as part of a deal to ease Dublin's huge debt burden.

The Republic of Ireland's central bank governor, Patrick Honohan, will discuss a plan with the European Central Bank (ECB) on Wednesday evening, according to the Reuters news agency.

Liquidation may mean that Dublin can delay the repayment of debts associated with the bank's bailout by many years.

An update is expected to be provided to the Irish parliament late on Wednesday.

IBRC chairman Alan Dukes was quoted by Reuters as saying the board had been liquidated earlier in the afternoon, and that the accountants KPMG were now running the bank.

If the Irish Republic gets ECB approval for the liquidation, IBRC's loans would be transferred to the National Asset Management Agency (Nama), the Irish "bad bank" responsible for recovering the value of problematic loans made by other Irish banks.

A so-called promissory note, under which Dublin must pay 3.1bn euros (£2.7bn; $4.2bn) a year until 2023, would be turned into sovereign bonds that may not have to be fully repaid for up to 40 years.

Toxic loan book

The result would be that Dublin postpones repayment of a huge debt burden. The government had previously wanted to reschedule the debt repayment, but this was blocked by the ECB after 18 months of negotiations.

The ECB was reluctant to be seen to be providing debt relief to a national government.

The IBRC has been winding down the old toxic loan book of Anglo Irish for more than two years.

The Irish government issued the total 31bn-euro promissory note in order to cover most of the 34bn-euro cost of rescuing Anglo Irish.

The bank was among the most prolific of lenders to property speculators and developers during the Irish Republic's housing bubble in the last decade.

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