Law Passed to Liquidate Anglo Irish Bank
13 February 2013
The Irish government passed emergency legislation to liquidate the former Anglo Irish Bank.
The ‘bad bank’ is currently trading as the Irish Bank Resolution Corporation (IBRC) and being run by KPMG after its board was dismissed on Wednesday, 6 February 2013.
Under the legislation, the bank ceases to exist and 800 employees lose their jobs, although most will likely to be re-hired by the National Asset Management Agency (NAMA).
The bank’s debt, which costs Irish taxpayers around €3.1bn a year, is expected to be transferred to a long-term bond held by the Central Irish Bank. The interest rate on the new debt has been cut to 3% compared to 8% on the old debt.
The deal required the approval of the European Central Bank before it could proceed. In a press conference today, president of the ECB Mario Draghi said that the ECB had taken note of the “Irish operation”.
Ireland has been paying €3.1bn a year in promissory notes to the ECB, which runs until 2023. However, following the Anglo Irish Bank liquidation, this will be turned into sovereign bonds and repayment delayed for up to 40 years. It won't wipe any ofIreland's debt, but may ease the effects of the country's international bailout later in 2013.
Last year Ernst & Young, the bank’s former auditor, was sued over its conduct in the run-up to the bank’s collapse and nationalisation in 2009.