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Bank 1

Bank 1

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Published by: thestorydotie on Jul 16, 2010
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Government Decision to Safeguard Irish Banking System
The Government has decided to put in place with immediate effect a guaranteearrangement to safeguard all deposits (retail, commercial, institutional and interbank),covered bonds, senior debt and dated subordinated debt (lower tier II), with the followingbanks: Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent,Irish Nationwide Building Society and the Educational Building Society and suchspecific subsidiaries as may be approved by Government following consultation with theCentral Bank and the Financial Regulator. It has done so following advice from theGovernor
the Central Bank and the Financial Regulator about the impact of the recentinternational market turmoil on the Irish Banking system. The guarantee is being/ovided at a charge to the institutions concerned and will be subject to specific termsand conditions so that the taxpayers' interest can be protected. The guarantee will coverall existing aforementioned facilities with these institutions and any new such facilitiesissued from midnight on 29 September 2008, and will expire at midnight on 28September 2010.The decision has been taken by Government to remove any uncertainty on the part ofcounterparties and customers of the six credit institutions. The Government's objectivein taking this decisive action is to maintain financial stability for the benefit
depositorsand businesses and is in the best interests
the Irish economy.le Financial Regulator has advised that all the financial institutions in Ireland willcontinue to be subject to nonnal ongoing regulatory requirements.This very important initiative by the Government is designed to safeguard the Irishfinancial system and to remedy a serious disturbance in the economy caused by the recentturmoil in the international financial markets.
Note of Meeting with Goldman Sachs, 21 September 2008 (Sunday)DSGKC. CH. BO'H. MO'I.) (for part). PN (for part)Goldman Saclis: Geoghegan + 1Basic points® Have examined INBS top 30 loans Ireland and top 30 loans UK® Lot of reassurance in those that there is real value there® But based on management discussions® Some of book could be securitised for liquidity purposes, but slow job , even withadvisers - would need new specialist
staff of
their own in houseo Riskiest part is not UK but Irish booko Very few loans above 250m. Irish bank well diversified ^® Will be difficult to get 100% recoveries for some loans. UK book - profit sharingventures in reality - some profit shares will pay this year° KPMG are looking through a worst case scenario° So far, could see hits eat through capital, but nothing to suggest it would go further° Auditors do not see perfor
worst than anywhere else® Management's central case assumption is loss
a few 100m° Essential to retain knowledge
management.° Liquidity a big issue - at current rates reaches limits in 11 days, but real danger ofacceleration. Loans are assignable (per McCanns) but would take lime to packagethem - work on assets continues® Convinced help from authorities will be required - soon° Suggested range
options for discussion with pros and cons (1) Nationalisation (2)Stand alone with liquidity support (3) Break up» Mark to market value right now maybe 50/60% but lot of value in loans
workedthroughthan thatsTo provide greater ahalysi ;al estate, legal and accounting person
Morgan Stanley
Irish Life & Permanent
Discussion Materials
20 September 2008

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