Ireland merges Anglo Irish under bank overhaul

DUBLIN: Two of Ireland's most debt-laden financial institutions, Anglo Irish Bank and the Irish Nationwide Building Society, merged on Friday under the government's radical overhaul of the country's lenders.

The merger, creating the Irish Bank Resolution Corporation (IBRC), is a "key element of the government's restructuring of the Irish banking system," Finance Minister Michael Noonan said on Friday.

Noonan said the name change was important to "remove the negative international references associated with the appalling failings of both institutions and their previous managements."

On Wednesday, the European Commission cleared a bailout plan for the two troubled institutions which are to be sold off over a decade.

Both institutions received massive state support during the global financial crisis after over-exposure to the loan and property sector caused their downfall.

Anglo Irish Bank and INBS jointly received 34.7 billion euros ($50 billion) in capital injections to cover their losses.

Ireland had in March ordered a drastic overhaul of the eurozone nation's stricken banking sector as the cost of bailing out its lenders topped 70 billion euros.

The Central Bank of Ireland earlier this year decided that four lenders needed to raise an extra 24 billion euros after it carried out vital stress tests on their ability to withstand another financial crisis.

The additional capital is being covered by the 35 billion euros provided for the banks as part of Ireland's huge 85-billion-euro debt rescue agreed in November with the European Union and the International Monetary Fund.

Copyright AFP (Agence France-Presse), 2011