Anglo Irish Bank will be split into two banks, one focused on funding, the other on asset recovery according to Bloomberg (via Zerohedge).
This would seem to mean that Anglo Irish Bank’s plan for a good bank, bad bank had been ditched in favour of something different. At the moment it seems, however, only slightly different from the plan that was previously disclosed.
Update: The Funding bank will be a government regulated entitity with protected accounts for clients. The Recovery bank will eventually be sold or have its assets “run off.”
Under the restructuring plan, the Funding Bank will be a Government-backed/guaranteed specialist deposit bank which will contain the bank’s deposit book. It will be a stand-alone, regulated bank, completely separated from Anglo’s loan assets and it will be owned directly by the Minister for Finance. This bank will not engage in any lending, but will provide a secure home for Anglo’s depositors and any new customers who wish to deposit their funds with it. Depositors with the Funding Bank will be completely insulated from the future performance of the rest of the current Anglo Irish Bank loan book.
The Asset Recovery Bank will also be a licensed regulated bank. Its dedicated focus will be on the work-out over a period of time of the assets not being transferred to NAMA in a manner which maximises the return to the taxpayer.
Costs for this new plan will be revealed in October.