Irish Bank Default Swaps Rise to Distress on Bailout

The cost of insuring the bonds of Irish banks soared to distressed levels amid concern that the government won’t be able to afford the cost of bailing out the nation’s banks.

Irish and international banks’ loan losses in the country may total at least 85 billion euros ($117 billion), central bank Governor Patrick Honohan said in Dublin yesterday. Morgan Kelly, an economics professor dubbed “Doctor Doom,” said on Nov. 8 that mortgage defaults may push the cost of Ireland’s bank bailout to 70 billion euros, more than the government’s estimate of 50 billion euros.