The Minister for Finance Mr Charlie McCreevy has said he regrets the "inevitable" loss to AIB investors as a result of the financial scandal.
Mr McCreevy was referring to the drop in the bank’s share price in both Dublin, New York and London this morning. Allied Irish shares fell over 16 per cent on the London and New York markets, while the Dublin market showed an initial fall of 20 per cent, which later settled at 16 per cent.
In a statement today Mr McCreevy said, "obviously, to the extent that the bank loses, the value of the bank must be affected, and some loss was inevitable in the circumstances".
But Mr McCreevy said the solvency and capital base of the AIB group was sound, and said there was no threat to AIB account holders.
He said that although AIB had suffered a "considerable blow to its financial position", it was not a disastrous situation when seen in the context of the overall strength of the institution.
Mr McCreevy said the uncovered fraud was "a reminder to the management of the bank, of other banks and to regulators and legislators of the importance of ensuring that financial institutions are well-capitalised and that their internal systems are up to the job of managing and controlling the increasingly complex nature of the financial markets and financial instruments with which they deal".
The Minister also said there were lessons legislators should learn and act upon. He said he had asked the Central Bank to issue a report to his Department, "in the light of these events" of their own investigations into the affair and to advise as to whether any changes to the legislative provisions governing banking supervision should be required.
Mr McCreevy said he understood that despite today’s events AIB would still record a "comfortable profitable position "for the financial year 2001 and said he hoped the global market would have "due regard for the fundamental soundness of the bank's capital base and reflect this in a fair view of its on-going prospects".