Moving Deposits

@ John

the deposits will help to get the loan-to-deposit ratio’s down at both AIB and ILP, so this, essentially, helps to meet the deleveraging target rather than what would have happened if the deposits simply left Ireland altogether (ie didn’t naturally move to another Irish institution). If they can somehow figure out what to do with AIB’s tracker mortgage book (ie NAMA type vehicle?), then AIB’s deleveraging is actually more or less done, apparently (assuming they can retain all the Anglo deposits).

1) How did we manage to ensure these desposits and Bonds went to AIB/IL&P if it was an aution?

2) I see that in AIB’s case:

New Assets + €12.2bn (bonds)
New liabilities: + €8.6bn (deposits)

Therefore it had too many new assets so had to give the difference in cash (€3.5bn) to INBS

SC reckons this brings AIB’S LTD down to 150%

I see in IL&P’s case:

New Assets: + €3.7bn (bonds)
New Liabilities: + €3.6bn (deposits)

SC reckons it brings IL&P’s deposits ratio down to 200%.

My question: Given the difference in the net position of the transfers for IL&P is only €0.1bn, why is it handing over €2.3bn in cash to INBS?

Does anyone know if can expect more juggling of assets and liabilities before Monday’s deadline elapses – all being done, presumably, to get the remaining zombies into some shape to pass the slightly more arduous, but still poilitcially constrained, EZ stress tests later in the spring?

Cornerturned explains it perfectly:

AIB has no money so they borrow the €3.5Billion from Anglo in order to pay back Anglo:

http://blog.cornerturned.com/2011/02/25/aibs-e3-5bn/

You just couldn’t make this madness up.

8 banks are supposed to have made offers.
Who are they and what were there offers?

Transparency 0 Bankers 10.

“The remaining 1,040 jobs at Anglo and 240 at INBS will reduce dramatically as the remaining €38 billion in loans at the combined bank are run down.”

This comment contradicts Enda Kenny’s promise to have both Banks closed by the end of the year. Or is the Journo just presuming Enda will do what he is told?

The argument about holding on the deposits being a good thing is all a function of the interest rate margin the bank can make. If the interest rate on these deposits is say 5% and the bank is loaning this cash out mainly to tracker mortgages at 3% then in means that we the taxpayer are subsidising the deposits by a tune of 2% per year as the banks liquidity will reduce by this amount every year and according to the golden rule of Irish banking all losses cost the taxpayer. If this is case it would better for the government to give the bank a NAMA bond or something with a harp on it if it has a liquidity problems so it can go off to the ECB and get funds at 1.5%

New Assets + €12.2bn (bonds)
New liabilities: + €8.6bn (deposits)

A deposit is a liability?

Is accounting really a legitimate practice?

@ Christy

eh, just a tad. NAMA bonds yielding 6mth Euribor (1.377%), deposits yielding what, 3%?

@ Greg

they have an auto-rollover option imbedded by the issuer (NAMA) for 12 months

@Jarlath
The accountants are looking good then. Could be he meant it as sarcasm?

Greg,
I agree that is the formal objective, and I should have been more explicit. But don’t you think that the ECB would like to see the balance sheets of the Irish banks shrink more generally?

I presume all the individuals who own these deposits are free to walk and take their business elsewhere if they don’t like the idea of being moved from one Irish basket case to another Irish basket case.

The flight hasn’t stopped yet.

Mary Hannafin got grilled mercilessly (I had to watch it through my fingers)by Vincent Browne as to why an Anglo bond of €750m was repaid in January. This is presumably the senior unguaranteed bond previously referred to by Karl Whelan in this post:
http://www.irisheconomy.ie/index.php/2011/01/28/anglo%e2%80%99s-january-31st-bond/

Vincent Browne was incorrect in saying this was not on foot of EU/IMF deal insofar as there is rather public admission of a side deal on senior bank debt which is not included in the memorandum.

However, the other issue was that to fail to pay the bond would have been an act of insolvency which would have triggered a winding up with depositors being treated parri-passu with the senior bond.

Presumably, the idea of selling on the deposit books is to get them out of there so the senior unguaranteed bondholders cannot use depositors as a human shield and therefore they have less leverage over the Government.

I don’t know if the Govt is anxious to have depositors in Irish Banks. I think the Govt is more anxious to have depositors out of Anglo and INBS. When you combine the pre-christmas legislation + the delay of the €10bn injection + the transfer of deposits by Court Order (important in context of Fir Tree action) then one begins to see a pattern which suggests that subbies and senior unguaranteed creditors of Anglo are in the cross-hairs notwithstanding all the chat about pressure from the ECB not to default on senior debt.

@ zhou_enlai

I saw that too.

With regards:

“Vincent Browne was incorrect in saying this was not on foot of EU/IMF deal insofar as there is rather public admission of a side deal on senior bank debt which is not included in the memorandum.”

The lack of clarity on the posited ‘side letter’ drives me crazy. It renders a lot of discussion moot, as it is like watching a developing chess game with certain areas of the board blanked out (or with invisible pieces in play). Not sure how it would be done, but ‘is there a side deal and what does it say’? would surely be a useful question to know the answer to. Any reason why we shouldn’t know it?

On a technical sort of level I thought Vincent was correct, as until the government of whichever stripe clarifies the issue of the existance or otherwise of deals not in the public arena, then interviewers should go on asking why certain actions have not been taken, or we shall remain in the land of nods and winks.

@Zhou,

I think you are right about the subbies and unguaranteed seniors being isolated in Anglo, but, noting grumpy’s justified exasperation, I think it is only happening now because Merkel/Sarkozy et al are finally coming to terms with the fact that they have banks in their own jurisdictions which are technically insolvent (though perhaps not as spectacularly so as Anglo) and that they will have to go after the bondholders in these in the same fashion to preserve their voters’ tax euros to recap some of their less dodgy banks.

@Frank Galton

Fir Tree got to Court but there action is against Anglo rather than the State afaik. The transfer was on foot of a Court Order. Hard to reverse that!

@Gavin Kostick

The side deal is interesting. It may be obscurity by design. We are told the ECB insisted on it as part of the deal but it is nowhere to be seen. Is it being hidden from the people or is it an illusion for consumption by bank creditors?

@zhou_enlai

I think the EU and Ecb via this supposed side deal have got into a position analogous to the Fannie and Freddie “implicit guarantee” that caused so much turmoil a while ago. You may recall talking heads for months banging on about this guarantee during the credit crunch.

It caused “inefficient pricing” on a whopping scale.

When FG invite me into the relevant building with suitable emergency powers, I will have it sealed off by the army while a search is carried out to find this document. Then, probably a quick phone call to Trichet out of courtesy to let him know we are arranging viewings of it in the next few days by Reuters, Bloomberg and CNBC Europe. NTMA will by pure coincidence be big holders of European bank CDS at the time. 😉

Markets seem to be anticipating trouble with 10yr at 9.33% now. Remarkable that there is 250000 customers between the two at this stage in the game.

250000 isn’t too remarkable to me as most probably have pretty small balances, up to former carpet bagger level in INBS, for example. For example, I’ve had no reason to move my money out of either institution, yet. There’s a government guarantee in place and they still paid good interest last time I looked. I do have less than 1 billion in my account, so I might not be important in the new economy but I’ll still shop around next time my bond matures.

how did the auction process work?

Seems to put the dink in co-inky-dink that INLP and AIB got the goodies at the best poss price.

triples all round.

@grumpy
“I think the EU and Ecb via this supposed side deal have got into a position analogous to the Fannie and Freddie “implicit guarantee” that caused so much turmoil a while ago.”
Exactly. The Irish banking system and sovereign debt is now Somebody Else’s Problem. The IMF recognise this, I reckon, hence their nervousness. All we have to do is sit tight, keep applying for payment variations and wait for the court to come up with the right answer. What we need to do is ensure that all happens in our best interest, both in terms of ring-fencing our remaining NPRF cash and in getting our cost base right (both public and private).

Only slightly off-topic, how sharp are the Irish regulators being wrt the IFSC and:

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/8346701/Libya-Gaddafis-billions-to-be-seized-by-Britain.html

Involving CAB probably a bit too ambitious,….maybe……?

@Hogan

“and in getting our cost base right (both public and private)”

….the missing link that will probably torpedo the strategy. How quickly could FG reasonably get out of election mode (has wasted months in this respect) and sell a different line to the public?

@John mcHale
We will know next week the criteria for the stress tests. As I understand it one of the components is a liquidity test so the extra deposits are a gift for AIB and il&p. However in the case of the latter the ratio is still 200% leaving them dependent on ebb. The 120% quoted would appear far too high.

It all reminds me of this story (old now):

It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted.
Times are tough, everybody is in debt and everybody lives on credit. On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a 100 euro note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the a 100 euro note and runs next door to pay his debt to the butcher.
The butcher takes the a 100 euro note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the a 100 euro note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers’ Co-op takes the a 100 euro note and runs to pay his drinks bill at the pub.
The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the a 100 euro note.
The hotel proprietor then places the a 100 euro note back on the counter so the rich traveler will not suspect anything.
At that moment the traveler comes down the stairs, picks up the a 100 euro note, states that the rooms are not satisfactory, pockets the money and leaves town.
No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.

Round and round we go!

@ Eoin,

Yes, could you explain how AIB can stamp 98.5 cents on Anglo bonds 84 cents, sounds more illegal than clever ?

@ Grumpy/John

its complicated. Took me, and some very smart other guys, a few hours to figure it out.

Anglo has been marking the NAMA bonds at 84 cents on its book, included as part of its 2010 unaudited accounts. They have 12.2bn of these, with a MV @ 84 cents of 10.25bn. They are also giving AIB 1.7bn in ‘assets’ (assumed to be cash balances) from the IoM operation. So total assets going to AIB = 10.25+1.7 = 11.95. Anglo receive a cash payment of 3.6bn from AIB, which means the net outflow of assets from Anglo is 11.95-3.6 = 8.35bn. They are losing 8.6bn in liabilities, so the whole thing, ignoring some minor differences and roundings which im missing, is fairly neutral, right?

The NAMA bonds are going to AIB as part of the deposit transfer, and AIB have put a value of 98.5 cents on them (what they get repo-ed at with ECB), so immediately AIB register a gain of 1.75bn. They have received 12bn in (their) MV NAMA assets, and 1.7bn in ‘assets’ (cash balances), so total assets of 13.7bn. They pay out 3.6bn in cash to Anglo, bringing net asset inflow of 13.7-3.6 = 10.1bn, against new liabilities of 8.6bn. Hence, 1.5bn capital gain.

Eoin, so it is a marking arbitrage, or if you like a accounting policy motivate swap, no?

This surely just translates to one or other of AIB or Anglo marking these inappropriately (note: not illegally or unlawfully). My first reaction would be that marking to repo haircut here might be allowed but might not be realistic.

Thanks Eoin. That is very helpful. The lingering question, however, is what value the markets — debt and equity — put on the new NAMA assets on AIB’s books. Were the Anglo valuations closer to the mark, notwithstanding their motivation for the mark down? But what you say will certainly make financials look better.

@ John et al

Lest we forget, Nama has announced it is redeeming some of it’s bonds at par shortly, so it’s not a ‘crazy’ valuation per se. Anglo’s previous low marking seems too low and designed for future outperformance. If we look to burn bondholders eventually at Anglo, have we saved 1.5bn for the taxpayer today?

@ grumpy

‘I am fairly cynial in general but was outdone here, because the reaction to my view was along the lines that although I might be right in theory, I just didn’t understand how small Dublin was and that it would all come down to who had money where.

There has been a cadre of naive decision makers and advisers inolved in this farce from the very beginning, combined with the likely fact that they were all pulled from the constituency of “true believers” so they never really got round to the idea that they might have to do some off-consencus thinking. Some probably wouldn’t know how to’

+ 1 Failte romhat. You don’t know how right you are. I refer to Richard Fedigan’s theme about the competence of folk who have not much experience in the big wide world. Also to Joe Lee’s theme of the core conflict betwen the possessor principle and the performer principle. The chickens have come home to roost.

Perhaps Anglo had no choice but to hold the NAMA bonds as marketable assets? Does a bank not require some proportion of their assets to be marked-to-market? (Tier 1?). In this case, the NAMA bonds would be in the “Assets available for sale” box of the Anglo balance sheet. AIB, however, have a deeper asset pool, so they can hold them as Tier 3 and say they are holding them to maturity.

It is arbitrage, but it is not uncommon for one bank to take a long-term view of what another bank considers a short-term holding. No?

Mr Brian Lucy
If you are right and I suspect you are, who is policing this and where is the integrity in the system? Why, so many years on since the start of this crises, is this acceptable behaviour? Also why does the mainstream media not understand what is actually happening here? It is truly demoralising.

@Barry T:

That story is even more annoying at the second reading. Everybody owes somebody else in the town 100 euro. Everybody is also _owed_ 100 euro by somebody else in the town. Net debt of everybody in the town: 0 euro.

As for nobody producing or earning anything? The butcher provided 100 euro worth of meat to the hotelier, and received 100 euro worth of meat from the pig farmer, who received 100 euro worth of feed and fuel from the supplier, who drank 100 euro worth of booze at the pub, and so on and so forth. Quite a lot was earned and produced, it was just earned and produced in the previous time period. If anything, it just goes to show how important credit is. Any chance AIB will loosen the purse strings a bit more, or is their LTD still too high? Are we just running to stand still?

What banking Licence are the deposits covered under? Anglos or AIBs.

If somebody had their savings split between the top so that neither was above €100,000 – if this transfer results in them having over €100K with AIB are they till covered as if the deposits were in different instiutions?

Niall, don’t think so.

Brian G, suggest you hunt down the Buiter, Citi note on ECB powers if NCBs go native. Very interesting. About 2 weeks ago. The problem is in my view more likely to come from the EU IMF credit line providers in combination with the Crokies because there would be no real need for the facility without them.

@ hoganmanhew

“They will now be AIB”

Where is the government advice to these savers (small section of population) to spread their risk?

Niall,

a) the gov line is the ELG makes the 100k redundant anyway
b) do you think the civil service should be expanded to take in the likes of Eoin, Hogan etc so everyone can get free proper investment advice?

@grumpy
“a) the gov line is the ELG makes the 100k redundant anyway”
Well that depends on a couple of things. Whether you have a fixed rate (so likely a fixed term) deposit and when you put the money in – after the institution joined the ELG guarantee:
http://www.jillkerby.ie/blog?month=9&year=2010
(A bit dated, but gives a flavour of the complications of ELG).

@ Prof Lucey

Gosh, they followed your advice after all, 10 months after you called for Anglo deposits to be sold.

@ Anybody who understands these things.

What was the ECB ins and outs on this? I understand it that Anglo’s NAMA bonds had to be withdrawn as collateral pending their packaging off to AIB. Instead “overnight” ECB assistance was given to Anglo.

Now the deal is complete the ECB expect their collateral back and to withdraw the overnight facility.

So does that mean that AIB now borrow from the ECB using NAMA bonds as collateral and then lend the money to Anglo? We really need diagrams with all this balance sheet engineering.

@ B_E_B

I am really struggling here. Anglo owed the ECB money. They posted NAMA bonds as collateral. Anglo transfer deposits + NAMA bonds to AIB. Why do they not still have a liability to the ECB? How was that liability repaid?

@BW 2

Try thinking of it as Anglo sold the bonds to the ECB each day, buying them back the next – all the time keeping the liability of the deposits. Then the liability disappeared – to AIB – so when Anglo returned the money to ECB they got the bonds and passed them hot potato like, to AIB. Aib then sell them to the ECB the next day to get money….etc, for a few days until the next, much cheaper week long sale and repurchase window is open etc, etc…..

Would you consider stopping taking the piss out of Brian Lucey bearing in mind how fecking complicated it is?!!

@ Grumpy, John et al

Ok I will promise to be good in future, but that Prof keeps attacking me!

Grumpy, you say Anglo got rid of the liabilities, but they also got rid of corresponding assets. That still leaves them owing the ECB a lotta dosh. John seem to also see it this way. This is not rocket science and yet the inability to get complete clarity is frightening.

BW2, John,

Welcome to the absurdity of fractional reserve banking! It only works in one direction. You are supposed to keep a faction of deposits at the CB just in case some idiot wants their money back, so to be a regulated bank they have to do this. If they have some short assets and lots of long ones – like fields with road frontage – and the short assets want out (and they still claim to have assets bigger than liabilities) they end up having to effectively get a depositor of last resort to replace the money that goes after the liquidity buffer has gone. You can end up with perma-repo. In theory the Nama bonds could be sold and the money repaid but……

If Anglo can get rid of all the deposits and short liabilities and stop being a bank, then as long as they can claim with a straight face the assets left on the balance sheet match the longer liabilities they can hang around and wind it down. Er, what would that make the bonds worth then???

The whole arrangement is a farce because it is almost designed to fail in deleveraging – hence the serial bubbles.

I don’t think the issue is liquidity — Anglo still owes the ECB/CBI.

Looking back now the answer is probably in the Simon Carswell article.

“The strategy would appear to be to leave the bad banks on ELA and help the other banks reduce their ELA exposure by giving them more ECB-eligible assets.”

and on we go….
now we are told the march stress tests will tell all…..

Simon Carswell explanation helps. I think this is what happened. AIB acquired 12.bn NAMA bonds. These were in effect funded 8.6bn by deposits and 3.6bn by ECB repo/whatever. So the 3.6bn cash given to Anglo was used to pay back the ECB. In turn AIB used or will use the NAMA bonds to get the ECB to give it back the 3.6bn of cash it had to fork out. Or something like that.

@BL

…. and I recall you were one of the first to tell me that it was all going to cost more than €35 billion. How right you were.

@all – on other ‘movers’

Blind Biddy (via Twitter from Kingstown): The X-Minister’s methods were strange – they caused us real surprise – to make us see the light – she threw bleed1n dust in all our eyes. Bye-Bye!

The reeking contempt dripping off the page http://www.irishtimes.com/newspaper/finance/2011/0228/1224291007008.html
Is a useful anodyne to complacency…regime change takes time

@Brian Lucey
“…regime change takes time”

Certainly does in this country – where our most radical form of revolution seems to involve replacing tweedldum with tweedledee..

Tweedledum and Tweedledee
Agreed to have a battle;
For Tweedledum said Tweedledee
Had spoiled his nice new rattle.

Just then flew down a monstrous crow,
As black as a tar-barrel;
Which frightened both the heroes so,
They quite forgot their quarrel

Our electorate is easily spooked by imaginary “monstous crows” as per DO’Ms column. Any hope our elected leaders are less jumpy?

@ Brian Woods II Says / @ Rob S

Brian / Rob, Simon Carswell’s explanation is on a net basis. It is likely that for the accounting and tax issues to be minimised, the transaction components would have been settled on a gross basis in multiple currencies. i.e. Carswell’s explanation obscures some of the finer details and issues.

As this is a step within a sector restructure, the economics of the transaction is only one parameter. A better way to examine the rationale for the structure is to look at how many policy objectives are satisfied by the move of NAMA bonds and deposits from Anglo. A non-exhaustive list is suggested below:
(a) Political (and governmental) desire to “obliterate” Anglo and INBS;
(b) NTMA objective of securing a stable funding platform for NAMA bond issuance;
(c) CBFSAI objective of financial stability through the re-capitalisation of the “continuing” banking sector to international standards;
(d) CBFSAI objective of improving the liquidity profile in the “continuing” banking sector;
(e) NTMA objective of ensuring that the transfer establish an observable price validating the AIB and BoI NAMA bond valuations to avoid a demand for incremental capital of c.€6-7bn and rising in the banking sector;
(f) DGCompetition objective to ensure that State subsidies for failed banks does not lead to inappropriate competition;
(g) ECB / CBFSAI objective of reduction in non-continuing banks (Anglo and INBS) access to euro-zone monetary operations;
(h) ECB policy objective of reducing “persistent bidders” in euro-zone monetary operations. This is a precursor step to re-introducing competitive tendering;
(i) CBFSAI/DGCompetition objective of ensuring the BIS “weak” banks policy is implemented;
(j) NTMA/DOF/CBFSAI objective of reducing the scale of the non-continuing banking sector and its contagion effects.

To achieve all these objectives in a single transaction, the Anglo assets put up for sale were the €12.3 NAMA bonds valued at 98.5% and the Anglo IOM subsidiary valued at NAV. The consideration paid was the receipt of c.€7.3bn equivalent of deposits in UK and RoI and a net cash payment of c.€3.2bn for the difference in value. [Source: AIB RNS 24/02 and Anglo RNS 24/02, 25/02]

Minimising tax liability in UK ad RoI would mean gross payments in the currency of asset or liability in the relevant geography.

Key observations here are:

(a) the last annual and interim reports for the Irish banks show a difference between Anglo’s approach to valuation of NAMA bonds (recognised as long-term instrument due to the rollover option and held as loans & receivables i.e. @c.85%) as compared with the approach taken by AIB and Bank of Ireland. (who seem to ignore the rollover option in valuing the bonds and recognised the bonds as short-term instruments). This means that AIB value the same bonds at c.€12.0bn and Anglo at c.€10.5bn. By paying Anglo consideration equivalent to the carrying value, Anglo is roughly capital neutral and AIB has a windfall capital gain. The only conclusion you can get to from this observation is that one or other bank has been mispricing these bonds. An inference might be that the Irish Authorities think that Anglo mis-priced the bonds and unnecessarily overcapitalised itself at the taxpayer’s expense. Hence both AIB and Anglo will show a profit on the bonds as the provision is released;
(b) The IoM transfer is clearly around c.NAV;
(c) The issues arising from gross settlement are interesting. Carswell has previously suggested that Irish banks (including Anglo) funded NAMA bonds through MLO/LTRO. Presumably given Anglo’s dependence on ELA the valuation discount and ECB haircut of 1.5% funded was through ELA. The week before, the ECB disclosed an increase in MLF from 1.2bn on 15/2 to 15.8bn on 16/2 [Source: Bloomberg ECBLMARG] which was primarily attributed by the papers to Anglo moving its bonds out of MLO (1 week basis) to MLF (o/n basis). On the date of the transfer, Anglo will have had to un-encumber the bonds by drawing on ELA (an increase of c.€12bn) to deliver them to AIB for which Anglo would be paid €12bn cash. An interesting question is where would Anglo get the collateral to do this?

The source of funds for gross settlement of this transaction through Euroclear is also unclear. There are two possibilities. If settlement was DVP then CBFSAI facilitated €24bn intra-day payments with ELA financing. If settlement of the bonds was “free” delivery then Anglo bore €12bn intra-day settlement risk until AIB used the bonds as collateral and settled with cash. As €12bn of cash is tricky to find at short notice at the best of times, the simplest answer would be that AIB accessed intra-day MLF until the rest of the cash from settlement of deposits occurred and was swapped to reduce the gross demand to €3.2bn.

Once the bonds were settled the deposits flows would also be settled and routine funding of the currency balance sheets then commence.

There is little evidence that the bonds are now financed through ECB on an ongoing basis as the ECB financial statements show that MLF fell by c.€13bn on 24/02, and that MLO and LTRO did not change by a similar quantum. Whether AIB is funding the net €3.2bn from other financial resources such as deposits (unlikely), through the bi-lateral repo market (expensive and/or not possible) or a CBFSAI facility such as ELA (possible) is not yet clear (the curse of publication lags);
(d) As this is an economics blog, a comment on the impact of the transaction on the economics of the banking system. The immediate impact of the previous paragraph is negative. Essentially €12bn financed at the ECB repo rate is now financed at either a private sector rate or an ELA rate. If so, the cost to the Irish banking sector rises by c.2% (=ELA rate – ECB repo rate) on €12bn giving an incremental cost of c.€240million p.a. (amortising). This is likely an upper bound as the transaction reduces the size of the “non-continuing” banks and the hope must be that the contagion effect on the continuing banks and the sovereign recedes. There is some evidence that this is starting to happen as AIB and sovereign CDS improved as a result of the news. So if yields are down from where they currently are when AIB and NTMA next issue, the economy more than benefits from lower funding costs. For example the National Debt is c.€93bn so every 1% improvement as the market starts to believe the policy-makers are getting on top of the bank restructuring will lower the costs to RoI c. €900million pa from where they currently are.

This is a cleverly constructed transaction that achieves multiple policy objectives. I take my hat off to the structuring team – it’s well thought through and balances the objectives of a wide range of stakeholders.

DottyD