State Financial Support For The Banking Sector Including The Proposed NAMA

Author:Mr Peter Osborne
Profession:McCann Fitzgerald

Ireland has responded to the effects of the global financial

crisis on Irish credit institutions principally by:

introducing a legislative framework within which the Minister

for Finance may – until 29 September 2010 in most cases

– provide financial support (including guarantees) to any

credit institution that the Minister designates for these purposes,

and recently announcing that a State guarantee would be put in

place for the future issuance of debt securities with a maturity of

up to five years;

in that legislative framework, setting new rules and procedures

for any acquisition of or merger involving an Irish-licensed credit


based on that new legislation, implementing – until

29 September 2010 – a State guarantee scheme in respect

of all retail, corporate and inter-bank deposits with and senior

unsecured debt, asset covered securities and dated subordinated

debt (Lower Tier 2) (excluding intra-group borrowing) of each of

seven credit institutions and certain subsidiaries of some of those

institutions, and in April 2009 announcing that a five-year

guarantee would be introduced for certain debt securities;

providing €3.5 billion core tier 1 capital to Bank of

Ireland and nearing completion of a similar investment in Allied

Irish Banks;

taking Anglo Irish Bank Corporation into public ownership;

announcing that a statutory National Asset Management Agency

will be established and operational by Summer 2009 to acquire from

systemically-important institutions (including at least the


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