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STEVE CHIOTAKIS: In Ireland, when Anglo-Irish bank failed, it nearly bankrupted the nation. Now the Irish government says it has a plan to split the bank up.
The BBC’s Ben Shore reports from Brussels.
BEN SHORE: To put the failure of Anglo-Irish bank into perspective, the Irish economy is worth about $210 billion a year. Keeping the bank afloat has already cost $25 billion — equivalent to over 10 percent of the nation’s output.
The bank made catastrophically-bad home loans during Ireland’s property boom. The global crash hit Ireland especially hard and forced the government to step in and take over. To try and stem the enormous losses, the government now plans to divide the Anglo-Irish bank into two parts: A retail bank to handle customer deposits; and a so-called “bad bank”, which will keep the bank’s disastrous loans and attempt to get at least something for them.
Ireland’s finance minister Brian Lenihan says this is the best option available.
BRIAN LENIHAN: Everybody saw what happened to the world economy when the Lehman’s bank was allowed to collapse. We don’t want to do that to our economy, and no amount of arguments about bailouts can obscure that.
The government acknowledges that some of the details remain to be worked out. But it’s confident that international investors will give Ireland the time it needs for the bailout to be finalized.
I’m the BBC’s Ben Shore for Marketplace.
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