State to buy up to €90bn of bad debts

FINANCE Minister Brian Lenihan said the Government will buy up to €90 billion worth of bad bank debts in a further effort to restore them to solvency.

As a result, Ireland becomes the first European country to allow the banks to rid themselves of the bad debts they built up in recent years through reckless lending to property developers.

Other countries have looked at the idea, but the difficulty in valuing the extent of the bad debts has prevented such a move.