Bank of Ireland

Three of Ireland's lenders could impose losses of up to 90% on bondholders under plans to see them help pay for the recapitilisation of the country's banking system.

Irish banks need an extra €24bn (£21.2bn) to survive the financial crisis, pushing the total cost of bailing out the banks to €70bn, the BBC reports.

The new Irish government could hit holders of bank debt with serious ‘haircuts', drying up bank funding and even derailing the European economic recovery, bond managers have warned.

HAIRCUT 100

The Republic of Ireland saw its €1.5bn (£1.3bn) bond issue snapped up at auction today, pointing to investor confidence in the strength of the economy.

The Bank of Ireland announced a €3.4bn (£3bn) capital raising last week to shore up its balance sheet, as the Irish Government prepares to increase its stake in the bank.