FG proposes new banks with clean balance sheets

Fine Gael is calling on the Government to establish "good banks" with clean balance sheets as an alternative to the €7bn recapitalisation proposal that is expected to be approved by the cabinet today.

The party says the current plan requires taxpayers to put huge amounts of money into AIB and Bank of Ireland without knowing how weak their balance sheets are.

It says this leaves the entire country dangerously exposed to massive bad debts.

Instead, Fine Gael is proposing the creation of new banks within both AIB and BoI, into which the €7bn in taxpayers' money would be invested.

These new banks would then take over all deposits and good loans from AIB and BoI, leaving the bad debts behind in legacy banks that would no longer engage in any lending.