Irelands Central Bank believes that ploughing billions more into the Banking system is too costly and it is now exploring “cheaper” measures to fix the current problems.
The news comes after a week of feverish discussion on further support for Irish Banks, with up to €30bn of the country’s €80bn bailout believed to have been earmarked to prop them up again.
Central Bank governor Patrick Honohan, said yesterday that pumping in more money to “overcapitalise” the banks was a “costly way to deal with the situation”.
“We’re trying to think of other ways to lay off risks that would be cheaper,” he added.
Those “other ways” are believed to include forcing Banks to sell off everything bar their core Irish operations, so they will have less risk on their balance sheets. Policymakers are also weighing up plans to allow banks transfer more of their loans into the National Asset Management Agency (NAMA), which could end up taking on residential mortgages.
Before the latest crisis, the bailout tally stood at €50bn.
The bailout team from the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Commission (EC) has been meeting Prof Honohan and his team for several days now.
The Central Bank Governor stressed yesterday that the delegation was “here to help”.
