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Tuesday, September 30, 2008

The Irish Guarantee

by Calculated Risk on 9/30/2008 10:29:00 AM

From the WSJ: Irish Government Moves to Safeguard Banking System

The Irish government Tuesday announced a surprise decision to safeguard the Irish banking system for two years, guaranteeing all deposits, covered bonds, senior debt and dated subordinated debt of the four main banks.
Finance Minister Brian Lenihan said the guarantee will cover €400 billion ($577.64 billion) of the €500 billion of bank assets involved. That is more than Ireland's gross domestic product of €190 billion and national debt of €45 billion.
Davy Research analyst Scott Rankin said: "The Irish government has taken out its bazooka."