International team in Dublin to work out scale of help needed
An IMF bail out for Ireland will have “negative implications” for insurance companies holding Allied Irish Bank debt, an analyst at UniCredit SpA has warned.
Munich-based UniCredit SpA credit strategist Philip Gisdakis, said: “The traditional role of the IMF is typically the one of the ‘bad guy,’”
He told Bloomberg that a bailout will “have negative implications for European banks, insurance companies and other institutional investors, which hold the bank debt in question.”
Irish central bank Governor Patrick Honohan has said he expects the country to ask for aid from the European Union and the IMF worth “tens of billions” of euros to rescue its battered banks and stop contagion across the region. The EU and the IMF have dispatched a joint mission to Dublin to talk to the government and central bank about the scale of financial assistance needed by the country’s financial institutions.
AIB was nationalized in January 2009 as loan losses spiraled in the wake of the bursting of the republic’s property bubble. The government also has taken a 36% stake in Bank of Ireland Plc and is preparing to take a majority stake in Allied Irish.
