September 9, 2010
Ireland's troubled banking system became the latest flash point in Europe's continuing economic crisis, as the government said it would split up the weakest of its major banks to stave off a run by depositors.
Irish Finance Minister Brian Lenihan, days after meeting European Union officials, said state-owned Anglo Irish Bank Corp. would be divided into a government-backed bank that would hold customer deposits and an "asset recovery bank" holding the bank's increasingly bad loans. The asset-recovery bank could be sold in whole or part down the road. Mr. Lenihan said the cost of the restructuring would be announced in October.
Ireland's renewed banking problems are sparking fears that the European Union's rescue of debt-laden Greece won't be its last. Earlier this year, the EU and the European Central Bank unveiled a raft of measures to stop the spiraling debt crisis in Greece from threatening the rest of the euro zone.
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