NCB warns against any attempt to challenge the EU head-on

IF a new government attempts to buy back the outstanding €17 billion unsecured senior bank debt against the wishes of the EU/ECB the fallout for the Irish economy could be catastrophic.

In a new analysis, stockbrokers NCB warns in a worst-case scenario, the EU reaction could be to prevent the Irish Central Bank from issuing further funding to the banks, which currently stands at over €50bn.

The EU could also suspend payments under the €85bn EU/IMF bailout pending a review of the changed situation.