Anglo Irish Bank Corp. Chairman Alan Dukes said the nation’s lenders may need about a further 50 billion euros ($68.2 billion) of capital, more than absorbing a bailout fund for the banks.
The Dublin-based government has already poured 46 billion euros into the banks, and can tap 35 billion euros of extra capital under a bailout agreed last year with the International Monetary Fund and European Union.
“A clean banking core will require something in the region of 50 billion euros,” Dukes, 65, a former finance minister, said in an e-mailed copy of a speech today. “A clean banking restructuring implies the acceptance of irrecoverable losses.”
The bailout provides for an initial 10 billion euros in capital to be available to the banks, with another 25 billion euros if needed, as lenders grapple with loan losses after the collapse of a decade-long real-estate boom. Irish central bank Governor Patrick Honohan said last month that he would be “disappointed and surprised” if the entire 35 billion euros was needed.
The state has injected 29.3 billion euros into nationalized Anglo Irish. Dukes, appointed as chairman in June, said the remaining “black hole” in the Irish financial system may amount to between 20 billion euros and 40 billion euros.
Filling that gap requires “long term 20 year to 30 year funding, on which there will be no return,” Dukes said.
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