Former deputy director of the IMF Dr Donal Donovan sees 'zero chance' of a bank bailout

Ireland is not going to get a retroactive bailout from the European Stability Mechanism according to the former deputy director of the IMF, Dr Donal Donovan.

Mr Donovan said that the chances of Ireland getting some money from the ESM as per an agreement signed in July last year were “fairly zero” in his opinion. However he said it is possible that there could be some other mechanism through which money could come into the country.

He called on the banks to emerge from their “defensive cocoon” and be less conservative with lending, while there could be a “rough time ahead” on mortgage arrears.