No need for €4bn if Anglo wound down, says Bruton

ANGLO IRISH Bank would not require the €4 billion being invested in it by the State if the financial institution was to be wound down in an orderly fashion, according to Fine Gael finance spokesman Richard Bruton.

Speaking on RTÉ's This Weekprogramme yesterday, Mr Bruton said that, contrary to the Government's view, an orderly wind-down of Anglo would not lead to the withdrawal of up to €64 billion in funding because the depositors who have money in the bank would be guaranteed by the State.

He said the Government should not agree to invest €4 billion in Anglo when investors who have provided funding to it through bonds were not covered by the guarantee and should contribute to the bank’s losses.

“If we are in a situation where the Government want these bondholders to make a contribution to the mess, you don’t promise €4 billion before negotiating with them.

“That is the negotiation chip – that we won’t be putting money in unless others are taking the pain.”

Mr Bruton said Anglo would not need €4 billion if it was wound down because in those circumstances it would not need a banking licence and would not be required to set aside a certain level of capital.