€8bn bank bailout in Ireland

February 2, 2009

The government of Ireland plans to inject €4 billion each into the Bank of Ireland and the Allied Irish Bank.

An insurance scheme to underwrite bad debts would also be created and the banks will attempt to raise €1 billion from shareholders. The two banks have been in need of recapitalization for several weeks. The government had previously offered €2 billion. The deal will see the government take on up to €24 billion of risk from speculative property loans by the banks.

The government has already moved to nationalize the country's third largest bank, Anglo Irish.