Banks could need further bailout as shares tumble

August 18, 2009 by Infowars Ireland

www.independent.ie

IRISH bank shares dropped substantially yesterday amid warnings there may need to be further investment by the taxpayer in the banking sector — on top of NAMA.

Finance Minister Brian Lenihan has already signalled the ‘bad bank’ is not the only solution being considered for the banking crisis and nationalisation may be on the cards.

The latest stock market volatility happened because investors took profits as they were worried a recent surge was not backed up by economic data.

Stock markets across Europe fell to their lowest closing point in more than a fortnight.

Shares in AIB were down 7.5pc to €2.06, while Bank of Ireland closed almost 6pc lower at €2.01

Coincidentally, the drop in share prices happened on the same day leading economist Colm McCarthy warned the taxpayer is likely to end up owning the banks because other sectors of the economy, besides property development, are also in trouble.

The author of the Bord Snip report said NAMA must buy the loans to property developers at a good price. But he warned that State ownership of the banks may be on the cards as farmers and hotel owners won’t be able to repay their loans.

“But the key point is that if the Government is tough-minded in the price for these loans, then the Government will end up putting capital separately into the banks and could end up owning them,” he told the Irish Independent. Read full article…