Merrill Lynch & Co. told the Irish government in 2008 it would cost 16.4 billion euros ($22.8 billion) at most to rescue its banks, a quarter of the eventual bill for bailing out its financial system. Merrill produced the estimate in a 45-page presentation to the Dublin-based Irish finance ministry on Nov. 18, 2008, according to documents released by the government after a freedom-of-information request by opposition lawmaker Pearse Doherty. Ireland paid the firm 7.3 million euros for banking advice in 2008 and 2009. Since the estimate, Irish taxpayers have been forced to pledge about 64 billion euros to rescue the nation’s banks after the worst real estate crash in Western Europe. In November 2010, the country sought an international bailout as it struggled with the mounting cost of propping up the banks. “Merrill Lynch completely underestimated the capital shortfalls within the banks, but the whole exercise was rushed after the guarantee,” Doherty, finance spokesman for Sinn Fein, said in an interview. “The role of external advisers, including bank auditors, really needs to be looked at as part of the banking inquiry.” Prime Minister Enda Kenny’s administration, which came to power in March 2011, is preparing to hold a parliamentary committee inquiry into the banking crisis. Ireland’s then government hired Merrill Lynch to advise on options for its floundering lenders in September 2008 before introducing a guarantee of most of its banks’ liabilities, totaling about 440 billion euros.
Posted on: Thu, 20 Mar 2014 11:02:31 +0000
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