The Irish government on Sunday said it was injecting 5.5 billion euros (US$7.6 billion) into three of Ireland’s major banks as part of a rescue package, taking a controlling stake in one.
The financing involves an initial investment of 1.5 billion euros for Anglo Irish Bank, which will give the taxpayer 75 percent of voting rights. This effectively nationalizes the bank, which was hit last week by a loan scandal.
Two billion euros each will also be provided to Bank of Ireland and Allied Irish Banks (AIB) and the government will take 25 percent of voting rights on directorial and board appointments, the finance ministry said in a statement.
The capital injection for Anglo Irish Bank is likely to take place after an extraordinary general meeting in the middle of next month, and for AIB and Bank of Ireland by the end of the first quarter of next year.
The government encouraged AIB and Bank of Ireland to also access private capital, but said it would be prepared to help further.
“The government is prepared to underwrite further issuance of core tier one capital and both Allied Irish Banks plc and Bank of Ireland have indicated an interest in such an underwriting in an amount of up to 1 billion euros each,” the ministry said.
Dublin “will continue to reinforce the position of Anglo Irish Bank and will make further capital available if required so that it remains a sound and viable institution,” it said.
The government’s move follows revelations last week that Anglo Irish Bank chairman and former chief executive officer Sean FitzPatrick failed to disclose an 87 million euro loan from the bank.
FitzPatrick, who had been the bank’s chief executive for almost two decades before becoming chairman in 2005, resigned on Thursday.
Over a period of eight years to last year, FitzPatrick temporarily transferred loans with Anglo Irish Bank to a building society so they did not show up in the bank’s report on directors’ loans.
“This transfer of loans did not breach banking or legal regulations. It was, however, inappropriate from a transparency point of view,” FitzPatrick said.
On Friday, Anglo Irish group chief executive David Drumm stepped down, saying news of the concealed loan made it “appropriate” for him to quit.
Ireland was one of the first countries to respond to the global credit crisis with a two-year unlimited guarantee scheme for banks that involves a contingency liability of 485 billion euros.
Asked at a press briefing on Sunday if he was rewarding reckless lending by the banks, Irish Finance Minister Brian Lenihan said: “Far from it, I mean heads have already started to roll, that’s very clear.”
“As far as reckless lending is concerned, this is a new beginning. We have to have proper lending, responsible lending, lending for the real needs of the economy. That is what I am determined to see happening,” Lenihan said.
The government also plans measures to improve credit flow to businesses and individuals, including a 10 percent increase in lending for small and medium firms, help for those in mortgage arrears and for first-time buyers.
The Chien Feng IV (勁蜂, Mighty Hornet) loitering munition is on track to enter flight tests next month in connection with potential adoption by Taiwanese and US armed forces, a government source said yesterday. The kamikaze drone, which boasts a range of 1,000km, debuted at the Taipei Aerospace and Defense Technology Exhibition in September, the official said on condition of anonymity. The Chungshan Institute of Science and Technology and US-based Kratos Defense jointly developed the platform by leveraging the engine and airframe of the latter’s MQM-178 Firejet target drone, they said. The uncrewed aerial vehicle is designed to utilize an artificial intelligence computer
The Chinese Nationalist Party (KMT) caucus yesterday decided to shelve proposed legislation that would give elected officials full control over their stipends, saying it would wait for a consensus to be reached before acting. KMT Legislator Chen Yu-jen (陳玉珍) last week proposed amendments to the Organic Act of the Legislative Yuan (立法院組織法) and the Regulations on Allowances for Elected Representatives and Subsidies for Village Chiefs (地方民意代表費用支給及村里長事務補助費補助條例), which would give legislators and councilors the freedom to use their allowances without providing invoices for reimbursement. The proposal immediately drew criticism, amid reports that several legislators face possible charges of embezzling fees intended to pay
REQUIREMENTS: The US defense secretary must submit a Taiwan security assistance road map and an appraisal of Washington’s ability to respond to Indo-Pacific conflict The US Congress has released a new draft of the National Defense Authorization Act (NDAA), which includes up to US$1 billion in funding for Taiwan-related security cooperation next year. The version published on Sunday by US House of Representatives Speaker Mike Johnson removed earlier language that would have invited Taiwan to participate in the US-led Rim of the Pacific Exercise (RIMPAC). A statement on Johnson’s Web page said the NDAA “enhances U.S. defense initiatives in the Indo-Pacific to bolster Taiwan’s defense and support Indo-Pacific allies.” The bill would require the US secretary of defense to “enable fielding of uncrewed and anti-uncrewed systems capabilities”
Renewed border fighting between Thailand and Cambodia showed no signs of abating yesterday, leaving hundreds of thousands of displaced people in both countries living in strained conditions as more flooded into temporary shelters. Reporters on the Thai side of the border heard sounds of outgoing, indirect fire yesterday. About 400,000 people have been evacuated from affected areas in Thailand and about 700 schools closed while fighting was ongoing in four border provinces, said Thai Rear Admiral Surasant Kongsiri, a spokesman for the military. Cambodia evacuated more than 127,000 villagers and closed hundreds of schools, the Thai Ministry of Defense said. Thailand’s military announced that
RSS