$7.7 billion bailout to save Irish banks

€5.5 billion ($7.68 billion) will be funded by the government of Ireland into the country’s three major banks to help them stay viable. Under the terms of the investment the state will take majority control of Anglo Irish Bank. The Irish government announced last week that it is going to make an initial investment of €1.5 billion in Anglo Irish Bank which will give it 75% control of the lender and a fixed annual dividend of 10%. The administration in Dublin said it can provide additional funding if required.

In addition, Dublin said it will invest in Bank of Ireland and Allied Irish Banks. Each bank will get the funding of €2 billion. The investment is to be performed via preference shares which will give the government 25% voting rights. As per statements from AIB it is going to obtain an additional capital of €1 billion from shareholders.

The government was forced to accelerate the investment procedures in light of the latest events when Anglo Irish revealed its chairman had kept shareholders in the dark about 87 million euros worth of loans he had received from the lender. Before this case investors were waiting for months for a bailout plan to match schemes in other countries.