Meltdown – Should Anglo be wound up?

From the Telegraph

“As the dust settles, it is clear that most of the damage in this crisis – reputational and financial – has been done by just one institution, Anglo Irish Bank,” Mr Honohan wrote in the FT.

The vast bulk of the €33 billion in bank recapitalisation costs will be caused by The Celtic Chernobyl. At Irish Economy Karl Whelan argues the costs proffered in the media to wind down Anglo are unrealistic (€70bn-€100bn), but agrees that the government are between a rock and hard place – having guaranteed all bank liabilities. He does however identify one, less costly alternative

One way of minimising the cost to the Exchequer stemming from the bank would be to wind it down gradually up to 2014, using maturing assets to pay off maturing liabilities. At some point, once the bank has shrunk in size, the government could decide to stop injecting capital and leave the bank to default on its €2.3 billion in subordinated debt.

See Anglo What Are The Options?

Discover more from Slugger O'Toole

Subscribe to get the latest posts to your email.

Categories Uncategorised

We are reader supported. Donate to keep Slugger lit!

For over 20 years, Slugger has been an independent place for debate and new ideas. We have published over 40,000 posts and over one and a half million comments on the site. Each month we have over 70,000 readers. All this we have accomplished with only volunteers we have never had any paid staff.

Slugger does not receive any funding, and we respect our readers, so we will never run intrusive ads or sponsored posts. Instead, we are reader-supported. Help us keep Slugger independent by becoming a friend of Slugger. While we run a tight ship and no one gets paid to write, we need money to help us cover our costs.

If you like what we do, we are asking you to consider giving a monthly donation of any amount, or you can give a one-off donation. Any amount is appreciated.