Sheltering under the Irish Government’s guarantee, the Irish banks have survived massive falls in their share prices.
In each case the current market price is less than 10 per cent of its peak — 2 per cent in the case of Anglo Irish Bank. Value to book ratio (using the last annual accounts) varies between one fifth and one sixteenth.
Time to recapitalize, then, I would guess. When the regulator finally decides to require them to increase their capital (not least to reflect the large foreseen losses of the “incurred but not reported” type), the Government will have to be ready to participate. But how?
For some ideas and a cautionary comment by an academic scribbler, see today’s Irish Times: http://www.irishtimes.com/newspaper/opinion/2008/1211/1228864660643.html