Bank shares - Investors approve of NAMA plan

TAOISEACH Brian Cowen insisted that the National Asset Management Agency (NAMA) was not being set up to bail out the banks or the developers. Irrespective of the real aim, it would seem that the proposals have come to the rescue of the banks.

Shares in the two main banks – Allied Irish Banks and the Bank of Ireland – increased significantly on the New York Stock Exchange on Wednesday afternoon, and they soared in Dublin yesterday. AIB jumped by 28%, while Bank of Ireland shares increased by 18%.

This was in the midst of heavy trading. A total of over 57 million shares in Bank of Ireland and AIB were traded yesterday, in comparison with around 9 million on a normal day. This should be welcomed because it provides a much need boost for investor confidence, which has been greatly undermined in the past 12 months.