Five High street banks in Ireland are to be paid £48bn by a state agency to cover their toxic debts in the biggest financial rescue in the country's history. Bonds issued by the National Assets Management Agency (Nama) will provide the struggling banks with £7bn more than the current £41bn value of their toxic debts.
Brian Lenihan, the Finance Minister, accepted that voters were furious with the banks, but said there was recognition that economic recovery would only come with a stable banking system.
"We must all now overcome our understandable anger and get on with the business of reform," he said, adding that a 10 per cent increase in property values over the next decade would be enough to ensure taxpayers got their money back. There was an angry response in the parliament, which was suspended several times during the debate, and protests outside.
The toxic debts are mostly owed by speculators who bought big during the Celtic Tiger boom years.
The banks to be rescued – Bank of Ireland, Allied Irish Bank, EBS building society, Irish Nationwide, and the now-nationalised Anglo-Irish Bank – were already brought under an emergency €400bn (£356bn) state guarantee last year as they faced collapse.