Ireland Ramps Up Bank Bailout; Cost Could Hit $68 Billion

Anglo Irish bank
Anglo Irish bank

The Irish government is working to take majority control of one troubled lender, Allied Irish Banks (AIB), and to inject yet more cash into another, Anglo Irish Bank Corp.

The moves could take the cost of Ireland's bank bailout to as much as 50 billion euros ($68 billion), according to Bloomberg News.

"The Irish banking system is at rock bottom today," Finance Minister Brian Lenihan told Bloomberg News.

The rising cost of the bank bailout has already promoted rating agency Standard and Poor's to cut Ireland's credit rating last month.

Anglo Irish Bank alone has received 22.9 billion euros since January 2009. According to figures from Ireland's finance ministry and central bank, it could need as much as 11.4 billion euros more.

The banks were hobbled by toxic loans related to the country's 10-year real estate boom.

"The big surprise is the increased capital number for Allied Irish," Sebastian Orsi, an analyst with Dublin- based securities firm Merrion Capital, told Bloomberg News. "The government could end up with over 90% of the group."