Just two banks survive Irish fiasco
Ireland will have just two main banks left after a 70 billion euro calamity branded one of the costliest financial crises in history.
The country's chief banker, Patrick Honohan, revealed another 24 billion euro is needed to keep lenders afloat and avoid a catastrophic crash of the entire system.
The massive cash injection is designed to win back confidence from international money markets who have been nervous about funding Irish financial institutions.
In a wave of tightly choreographed statements, Central Bank governor Mr Honohan disclosed the amounts needed to safely buffer four banks against further shocks after long-awaited stress tests on the institutions, saying the recapitalisation was needed after "one of the costliest banking crises in history".
Allied Irish Bank (AIB) needs 13.3 billion euro, Bank of Ireland needs 5.2 billion euro, building society EBS requires 1.5 billion euro and Irish Life and Permanent needs another 4 billion euro, he announced.
With the lion's share of the latest multi-billion euro bailout coming from taxpayers, most of Ireland's banking system will effectively be brought under state control. The promised final bill for the banking clean up - 70 billion euro - is half the value of the entire Irish economy.
The new coalition Government said it will vastly shrink the banking system from six homegrown lenders to two main "pillar" banks, with Finance Minister Michael Noonan vowing there will be "no half measures" in the masterplan to finally draw a line under Ireland's banking disaster.
Mr Noonan indicated Ireland's six domestic lenders will be replaced by two "universal pillar banks" - foremost will be Bank of Ireland, seen as the strongest of the surviving lenders, and which will be ordered to slim down by selling off 30 billion euro in assets within the next two years.
Allied Irish Bank, once the country's largest bank, will merge with EBS to form the second main financial institution. The plan will also see Irish Life & Permanent forced to sell off its lucrative pensions division Irish Life.
Anglo Irish Bank has already been nationalised and is being wound down along with Irish Nationwide - the bill for closing the doors on the two lenders is 35 billion euro alone.