Closing Anglo 'would cost taxpayer more': Dukes
The incoming head of state-run Anglo Irish Bank today said allowing the institution to go under would cost taxpayers more than the billions the Government is spending to keep it open.
Chairman and former Finance Minister Alan Dukes said it would cost more than €20bn to shut the lender’s doors for good.
“That’s not something that would be wise to do now,” he said.
Mr Dukes, who is expected to take over from Donal O’Connor in July, said keeping the bank afloat through recapitalisation, sorting bad loans and moving the institution towards a business bank, would cost much less in the long run.
He was unable to say how long it would take to repair the bank.
“Closing the bank down immediately would hit the taxpayer to a much bigger extent than maintaining the bank operations, producing a viable business bank, which could, if things work out well, be refloated into the private sector with perhaps a net gain to the taxpayer,” he said.
Anglo’s annual report is due out before the end of the month.
Mr Dukes added: “Closing the bank down at this point would crystallise losses which could otherwise be spread over a period of years and would not allow us then to build on this more viable commercial bank end.”
The senior management change was announced after Anglo yesterday issued legal action against former chairman Sean FitzPatrick to recover loans of €70m.
Mr Dukes said the case was being treated in the same way as any other debt.
“The bank will take whatever measures it can to maximise the return. There are cases where it will not be possible to recover all the money owed.”
Finance Minister Brian Lenihan paid tribute to Mr O’Connor’s work at a time of great challenge for the bank and the financial system.
“Mr O’Connor has worked tirelessly to help stabilise the bank and introduce a new management team to lead it in the future,” Mr Lenihan said.
“I greatly appreciate his dedication to his work at the bank and his steadfast support of the Government’s efforts to stabilise the banking system.
“I know how onerous and demanding his role was over the last year and I am greatly indebted to him for his important contribution.”
Mr O’Connor held the post of chairman since Mr FitzPatrick resigned in December 2008 amid massive controversy over secret loan deals he had kept hidden.
Mr Dukes, the former Fine Gael TD who devised the 1987 Tallaght strategy to support economic reforms of the time, has been closely involved with Anglo since the state took control.
“As a member of the board, Alan has been intimately involved in the bank since it was nationalised,” Mr Lenihan said.
“His appointment will ensure continuity as the bank charts its future. I know Alan will bring his keen intelligence and application to the task.”
| Related Stories: |
|
