Tests Show Irish Banks Still Ailing

By LANDON THOMAS Jr.
NYT

LONDON — Once again, Ireland’s banking mess seems to be sending a message that Europe does not want to hear: only by dealing with stricken banks can the Continent expect to end its debt crisis soon.

Just months after a banking collapse forced an 85 billion euro ($120 billion) rescue package for the country, the Irish central bank is expected to announce on Thursday that the latest round of stress testing shows that the nation’s banks may need 13 billion euros to cover bad real estate debt. On top of the 10 billion euros already granted by Europe and the International Monetary Fund for the banks, that would bring the total bill for Ireland’s banking bust to about 70 billion euros, or more than $98 billion.

Some specialists say the final tally could be closer to $140 billion, an extraordinary amount for a country whose annual output is $241 billion. Trading in shares of Irish Life and Permanent, the only domestic bank to have avoided a state bailout, was suspended Wednesday after reports that it might have to seek government aid as well.

Dermot O’Leary, chief economist for Goodbody Stockbrokers in Dublin, says that Ireland can no longer afford to shoulder the still-growing burden of its banks. The nation’s interest payments are set to rise to 13 percent of government revenue by 2012 — a figure that trails only Greece’s 18 percent, Mr. O’Leary wrote in perhaps the most definitive report to date on Ireland’s financial ills.

(More here.)

You have read this article with the title Tests Show Irish Banks Still Ailing. You can bookmark this page URL http://ogbcommunity.blogspot.com/2011/03/tests-show-irish-banks-still-ailing.html. Thanks!