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Ireland’s Bank Bailouts Were ‘Overly Expansive,’ Honohan Says

Feb. 1 (Bloomberg) -- Irish Central Bank Governor Patrick Honohan said the institution is working to ease the burden of the state’s bailout of lenders, which he described as “overly expansive.”

“The bank is currently engaging with external partners to limit and smooth the impact on Irish balance sheets of the indebtedness accumulated as a result of the overly expansive decision to socialize banking losses, to help accelerate recovery of employment on a sustainable basis,” Honohan said in a speech to be delivered in Dublin today, according to the text of his remarks.

Irish taxpayers have committed 63 billion euros ($86 billion) to rescuing banks after the collapse of a property bubble in 2008.

Honohan, who is also a member of the European Central Bank’s Governing Council, is preparing to present a new plan at one of the next ECB meetings on how the bailout of former Anglo Irish Bank Corp. can be restructured, a person familiar with the matter said on Jan. 29. ECB policy makers rejected his initial proposal on how the bank’s bailout could be restructured with central bank support, three people said the same day.

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Fergal O’Brien at fobrien@bloomberg.net

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