Ireland Banking Day of DOOOOOM

by Colman
Thu Mar 31st, 2011 at 06:42:05 AM EST

The government is announcing the results of stress tests at 4:30pm today and is expected to annouce a restructuring of the banks this evening in the Dail . AIB, Bank of Ireland and Irish Life and Permanent shares have all been suspended. From RTE

Following last week's summit of EU leaders, and the decision to put on hold any decision about the interest rate on Ireland's bailout, attention was explicitly drawn to the state of the banking sector. EU leaders will want to know that the stress tests are to reveal once and for all, as far as possible, the true vulnerability of Irish banks.

They're worried about the poor senior bondholders though: what if they had to carry the consequences of their decisions?

That is something the European Commission, the ECB and certain eurozone members have, to date, ruled out. Although one EU source told RTÉ News that if there was to be any burden sharing by bondholders it would have to be voluntary, and would require the consent of the so-called troika of the ECB, the European Commission and the IMF.

I have this mad hope that Noonan will stand up in the Dail and tell them to go screw themselves, that he's wiping out the senior bondholders and that they need to go fix Europe's banking system right now. Think of it as tough love.

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