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Law passed to liquidate Anglo Irish Bank

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7th Feb 2013
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The Irish government passed emergency legislation today to liquidate the former Anglo Irish Bank.

The ‘bad bank’ is currently trading as the Irish Bank Resolution Corporation (IBRC) and being run by KPMG after its board was dismissed on Wednesday.

Details of negotiations between the European Central Bank and the Irish government were leaked this week, with the government coming to a decision today.

Under the legislation, the bank ceases to exist and 800 employees lose their jobs, although most will likely to be re-hired by the National Asset Management Agency (NAMA).

The bank’ s debt, which costs Irish taxpayers around €3.1bn a year, is expected to be transferred to a long-term bond held by the Central Irish Bank.

The deal required the approval of the European Central Bank before it could proceed. In a press conference today, president of the ECB Mario Draghi said that the ECB had taken note of the “Irish operation”.

However Irish broadcaster Radio Telifís Éireann (RTE) reported that a deal had been agreed. 

Ireland has been paying €3.1bn a year in promissory notes to the ECB, which runs until 2023. However, if the Anglo Irish Bank liquidation goes ahead, this will be turned into sovereign bonds and repayment delayed for up to 40 years.

It won't wipe any of Ireland's debt, but may ease the effects of the country's international bailout later in 2013.

Last year Ernst & Young, the bank’s former auditor, was sued over its conduct in the run-up to the bank’s collapse and nationalisation in 2009.

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By schwartz
09th Feb 2013 21:43

outstanding debts to IBRC

what will be the ramifications to existing/restructured debts that fail to be obligated and by who?

 

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