September 18, 2009

Restructuring and bank mergers will be on the agenda as part of the price for NamaTHE GOVERNMENT decided not to get into specifics on how it might shape the Irish banking industry in the future when Minister for Finance Brian Lenihan outlined the €54 billion price to be paid for the Nama-bound loans.There had been growing expectation that he would make more detailed reference to possible mergers, given that any State capital injections would be conditional on approval from the European Commission with a nod to some kind of sectoral restructuring.

However, it was a case of first things first and providing a broad estimate of how much the Government would pay for the bad loans.Mr Lenihan said that the banking system had “let us down” and that “the existing structures cannot remain the same”. A number of banks are developing restructuring plans to “tight deadlines”, he said, to meet EU requirements to win approval for their recapitalisation by the State.