Irish government takes over Anglo Irish Bank

16 January 2009

The Irish government today announced the nationalistion of the Anglo Irish Bank as it found a planned capital injection of 1.5 billion euros would not be enough to save the bank.

The bank had lost 98 per cent of its value in last year's financial market meltdown. Its position worsened in December following revelations of secret loans by its directors that led to the resignation of its finance director Willie McAteer and CEO David Drumm, and the nation's financial regulator.

Bank chairman Donal O'Connor on Friday revealed that his predecessor Sean FitzPatrick used concealed loans for a wide range of investments, including in property funds, wealth management products, private equity investments and pension funds.

Patrick Neary, CEO of Ireland's financial regulator, resigned on the same day that an inquiry showed the agency failed to take ''appropriate and timely'' action.

The government said it plans to manage Anglo Irish bank on an arms length basis as a commercial entity. The bank will have a new board while Donal O'Connor will continue as chairman.

The Irish government also made it clear that it will ensure its continued viability and that all employees will remain employed by the company.