The Anglo Irish Bank is to be nationalised following a failed plea for recapitalisation funds. About 50% of the bank’s customers are based in the UK.
The Irish Government says it is taking the bank into public ownership to secure its future.
The bank had previously asked the state to loan €1.5bn (£1.4bn) into the bank, but failed in its bid.
The government now says there is no need for customers to panic and all bank employees would stay with the company. Shareholder rights will also be protected.
The bank’s board says it will work with the government to ensure its long-term commercial viability.
Customers are protected as government legislation passed last October guarantees all deposits in the republic’s banks and all money borrowed by the banks from other financial institutions.
In a statement, the government says: “The funding position of the bank has weakened and unacceptable practices that took place within it have caused serious reputational damage to the bank at a time when overall market sentiment towards it was negative.
“Accordingly the government believes that the recapitalisation is not now the appropriate and effective means to secure its continued viability. Therefore the government must move to the final and decisive step of public ownership.”