Government signals move towards Anglo wind-down

 

The Government has signalled that it is moving towards a position whereby Anglo Irish Bank is wound-up completely rather than retained in some form.

Discussions on the future of the troubled bank dominated today’s meeting of the Cabinet, the first after the summer break.

In recent days, the Green Party has said its official view is that the bank be wound down as quickly as possible, more quickly than the 10-year period associated with an orderly wind-down.

However, the Minister for Finance Brian Lenihan has put forward a contrary view, saying that if there is a winding up, that it should take place over a long period of time, in order to spread out the cost to the taxpayer.

Both the Fianna Fáil and the Green sides of Government acknowledged today that there are different views and a difference of emphasis in terms of approach.

Nevertheless, in a statement issued after the Cabinet meeting, the Government said it was united in its determination to resolve the future of Anglo, at the least cost to the taxpayer and “in a way that gives finality”.

The reference to finality was being seen as an indication that both Government parties may now favour a wind-down, rather than the good bank/bad bank proposal that has been put forward by the management of the nationalised bank.

However, the European Commission and the European Central Bank will also make major inputs into the plan for the future of Anglo. The Government finalised its submission to the Commission yesterday and is expecting a response later this month.

“The Government is working with the EU authorities to that end; it is also in active discussion with the EU Commission about the future of the bank guarantee,” said the statement.

While Green finance spokesman Senator Dan Boyle did not specify a time period when calling for a quicker wind-up, he said he would like it to be quicker than 10 years.

The motive behind the Green Party’s new position on a quicker wind-up might have been a reminder to the public that the party was determined to resolve the crisis at the beleaguered bank. It will not be a red-line issue for the party, it is understood, if it can be shown that a longer wind-down benefits the taxpayer.

Yesterday, Anglo announced it had incurred losses of some €8.2 billion for the first half of 2010, the highest ever losses recorded by an Irish commercial entity.