Bank recapitalisation and the Irish public finances Although the Irish Government’s decision, in the turbulent days of September 2008, to legislate for a blanket guarantee of the liabilities of the main Irish retail banks, was taken on the basis of advice that the banks faced liquidity and not solvency difficulties, it soon became generally accepted that bank capital should be boosted.
Nevertheless, with the strong support and joint efforts of all parties, the financial industry has managed to overcome such difficulties as the local economy develops. As at the end of May this year, the NPL and CAR ratios of the banking sector were 0.1% and 15.5% respectively; profitability was at all-time high.