THE taxpayers’ bill for bailing out Anglo Irish could be as high as €39 billion, the bank’s chairman Alan Dukes has conceded.
Mr Dukes stressed he did not think the costs would reach that level, but he is “open to correction”, when definitive figure is calculated next month as part of the splitting apart of the nationalised institution.
Finance Minister Brian Lenihan initially said the bailing-out of the bank would not impact on taxpayers, but over the past two years the state losses incurred by getting involved with Anglo Irish have risen starkly to around €25bn at present, with some experts suggesting it will end up as high as €39bn.
With the bank being split into an assets recovery and funding operation after the EU turned down the preferred Government option of dealing with Anglo Irish, managers are now trying to pinpoint how much the institution will cost the state.
Mr Dukes said he favoured the calculation of final losses erring on “the pessimistic side” so that the figure did not have to be revised higher again.
“I don’t think it will go as far as €39bn, but I’m open to being corrected on that when we have done the exercise,” Mr Dukes said on TV3’s Tonight With Vincent Browne.
He described the bank’s losses as “catastrophic”.
“It shows the extent of the madness that went on that gave rise to the kind of loans that are now so impaired,” he said.
Chief executive of Anglo Irish Bank Mike Aynsley said he expected the institution would be split-up by year’s end.
Mr Aynsley admitted the new structure was not the format previously discussed, but was similar enough to earlier blueprints for much of the framework to already be available.
He said “certainty” had now been given to Anglo’s future and this would prove a positive thing for the international markets.
The bank chief admitted Anglo had experienced some deposit withdrawals since the Government announcement, but nothing “substantial”.
Green leader John Gormley said he was not disappointed the Government had not gone for the quicker wind-down of Anglo called for by his party.
“The split between the funding bank and the asset management bank, I think, has been met with overall approval and that was reflected [in the markets].
“What we were looking for is a wind down but a wind down which is in the best interests of the taxpayer ... and I am confident that the path on which we have embarked will do exactly that,” he said.
Meanwhile, Labour leader Eamon Gilmore attacked a proposal by European Central Bank president Jean- Claude Trichet that countries breaking public finance rules be temporarily excluded from Europe’s political decision-making.
“The rules for decision making within the European Union are set down in the European treaties. They are not a condition of what’s happening in the European Central Bank mechanism,” he said.
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