(FT) -- The cost of Ireland's bank bail out is set to reach €34bn ($46 billion) as the central bank on Thursday announced additional capital injections for Anglo Irish Bank and other institutions, putting the budget deficit on track to hit ten times the European Union guidelines for eurozone members.
The regulator said the final bill for Anglo, the bank at the centre of Ireland's disastrous property crash, would be €29.3bn ($40bn). A further capital injection under what it called " severe hypothetical stress scenario" would lift total to €34bn if commercial property prices, having fallen 65 per cent from peak values, stayed at those levels for 10 years.
The bail out costs will lift the fiscal deficit from the planned 11.75 per cent of gross domestic product in 2010 to a spike of 32 per cent, compared with the 3 per cent Maastricht treaty guidelines used by eurozone members.
Allied Irish Banks will need a €3bn ($4bn) in addition to the conversion of the government's existing €3.5bn ($4.7bn) preference share investment, lifting the state stake in the lender to over 90 per cent. The government also announced that the current chairman Dan O'Connor and acting managing director Colm Doherty are to step down.
CNN
