Ireland's government opposes nationalising top banks Bank of Ireland and Allied Irish Banks as it would hit their funding and “torch” shareholders, Finance Minister Brian Lenihan said on Sunday. Lenihan had already said he wanted to avoid fully taking over the two leading banks in the process of setting up the National Asset Management Agency, a bad bank, this year, though taking a majority stake has remained a possibility. But the option of raising the 25 percent indirect stake he holds in each bank to full state ownership has been resurfacing in politicians' and analysts' remarks. “Pre-emptive wholesale nationalisation would be very dangerous for the country,” Lenihan said in an interview with the Sunday Business Post newspaper. Lenihan, who took over Anglo Irish Bank in January, said nationalising Allied Irish and Bank of Ireland would “torch” shareholders and damage the banks' ability to raise debt. “The banks would no longer be judged on world markets, their management would be under suspicion of political interference given that I would be the sole shareholder,” Lenihan said. “Quite a number of lenders do not lend to nationalised banks at all.” NAMA will take over property loans with a nominal value of up to 90 billion euros ($129 billion), and the subsequent write downs could force the government to give them more capital. “If losses are on a scale that increased public ownership of these institutions needs to take place, then that should take place,” Lenihan said. In another article on Saturday that still reverberated in Sunday's local press, former prime minister Garret FitzGerald said a failure to pass legislation on NAMA and budget reform could lead to a rescue by the International Monetary Fund. “I am concerned... that the government may fail to get through by early December either or both its budgetary proposals and its measures to deal with our banking crisis,” FitzGerald wrote in an Irish Times editorial. “This could undermine our capacity to borrow the huge sums we need to keep going.”
