ALLIED Irish Bank could be nationalised by the end of the week after President Mary McAleese signed controversial new legislation into law.
The decision, following a meeting of the Council of State to consider the Credit Institutions (Stabilisation) Bill, paves the way for Finance Minister Brian Lenihan to make sweeping changes in the banking sector. He is now expected to pump up to €4.5bn into AIB over the coming days.
The injection will virtually wipe out AIB’s shareholders, who have already lost tens of millions of euro in share investments over the last two years.
The Government initially wanted to keep AIB listed on the stock exchanges but sources said “delisting” the bank is now a distinct possibility.
AIB, along with the other major Irish banks, was recently given an end of February deadline to meet tough new capital targets. In AIB’s case, it must raise almost €9.8bn by the end of February, a target that overtakes the €4.5bn it was originally mandated to raise by the end of the year.
As well as giving Mr Lenihan the power to act immediately on AIB, the new bill also gives him unprecedented power. He can direct banks to take actions, move loans and deposits between banks and force losses on subordinated bondholders who lent to the banks at high interest rates.
The decision to sign the new bill into law came as a huge relief to the Government, which rushed the new legislation through the Dail in four hours.
It drew criticism from opposition parties, which raised concerns about the powers being given to the minister.
The European Central Bank also had concerns, saying the bill was “insufficiently legally certain” on some key issues relating to the euro system.
President McAleese met with the Council of State, which is made up of 22 members, including the Taoiseach, the Tanaiste, the Ceann Comhairle, the Cathaoirleach of the Seanad, the Attorney General, the Chief Justice and the President of the Supreme Court.
A short statement was issued, saying: “President McAleese has signed the Credit Institutions (Stabilisation) Bill 2010 this evening pursuant to the Constitution and it has accordingly become law.”
– Michael Lavery
Allied Irish Bank could be nationalized by the end of the week
Brian lenihan is about to pump €4.5bn into AIB over the coming days.
Doing this is nationalizing this bank and yes we can expect delisting at to-days share price of.40 cent there is not much more pain now for the wiped out shareholders
There is no use in trying to fool the markets any longer this bank in history.
However the game is still on for Bank of Ireland and the Minster along with the directors are playing a real smart game of course this bank will follow the same rout as Allied Irish Bank as they are still hiding their derivate positions which must have huge losses
Trying to convince the markets this bank is sound is just laughable
This Bank is going down! Forcing is customers to pay exorbitant charges is not going to get this corrupt bank out of a hole