Frantic efforts by Bank of Ireland to stay out of state ownership were dominating the talks between the IMF and Ireland's negotiating team this weekend.
Insiders said that while AIB was now unable to escape full state control, BoI was fighting a rearguard action to duck the same fate.
All the banks are now required to provide 12 per cent capital ratios, necessitating either a further massive injection of state funds( triggering nationalisation) or burning bondholders in a debt/equity swap.
A reliable source at the talks reported yesterday that both the National Treasury Management Agency and Nama were resisting attempts by the IMF to force the Government to take all the banks into full state ownership.
Last week, financial shares tanked as rumours of state takeovers fuelled fears of a further wipeout in values.
Elsewhere in the talks, the main sticking point is believed to be the interest rate at which the money will be lent by the IMF/European fund to Ireland, not only to recapitalise the banks but also to plug the hole in the public finances.
Leaks from the talks suggest that the interest rate could be as high as 5 per cent, implying that if the full €85bn was drawn down, annual repayments could hit €4.25bn.
Last week's four-year plan was based on an average growth rate of 2.8 per cent over the next four years.
It is believed that the IMF is less inclined to believe that this a realistic figure than the European Commission and ECB. The consent of all three parties is necessary for the Government to draw money from the fund.
http://www.independent.ie/opinion/columnists/...n-of-boi-2439301.html
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