Belfast Telegraph

Thursday 31 July 2014

Banks 'should be sold off overseas'

Central Bank governor Patrick Honohan has said Ireland's banks should be sold off to foreign owners

Ireland's banks should be sold off to foreign owners to quicker clean up the debt crisis, the country's top banker has said.

Patrick Honohan, governor of the Central Bank, also claimed a new government will be able to change the terms of the 85 billion euro IMF/EU bailout.

The banking chief said getting overseas investors to take over the homegrown banks that survive the current economic mess was looking like the best option.

"Increasingly, it seems evident that placing the continuing parts of the system on a firm footing can best be done through the involvement of new foreign owners who can bring capital, risk control and other management skills," he said.

In a speech to the Institute of International and European Affairs (IEA) in Dublin, he said such a move would "short circuit" measures needed at the moment to reduce the banks' financial risk to the state.

These measures could be prolonging the clean-up process, he said.

Mr Honohan said the prospect of international investors being attracted to Irish banks was "not unreasonable". He added: "I look forward to welcoming new owners of Ireland's downsized and cleaned-up banks."

Mr Honohan also suggested a new government would get a "sympathetic hearing" from the IMF/EU if they wanted to bring in alternative cost-cutting measures, as long as they brought the country's finances under control.

Rolling back Celtic Tiger excesses has heightened uncertainty among international lenders but the bailout package had bought time to restore confidence in Ireland, he said.

In a reference to claims the deal diluted Irish sovereignty, he argued its success was hinged on the actions of Irish authorities. Mr Honohan added that the IMF/EU does not believe Ireland's debt crisis is anything other than manageable.

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