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.
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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.
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Davy Research analyst Scott Rankin said: "The Irish government has taken out its bazooka."