UK banks bail-out Irish subsidiaries

Lest anyone think that the asset bubble (and concomitant crisis) is confined to America, Ireland continues to reel from the bust. Banks in the United Kingdom continue to pump billions of pounds into their Irish subsidiaries, which are struggling from collapsing real-estate prices.

Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, rescued by
British taxpayers last year, injected 3.03 billion euros ($4.4 billion) into
their Irish units during the past 10 months amid rising real estate losses.

“The scale of that figure is quite shocking,” Brian Lucey, associate professor of finance at Trinity College Dublin, said in an interview. “They weren’t leaders in the Irish market. The figure just shows the level of clean-up needed.”

British banks invested in Irish real-estate developers at the height of the “Celtic Tiger” boom and are now writing down investments amid the worst property slump in western Europe.