SIMON CARSWELL Finance Correspondent

ANGLO IRISH Bank was advised that a liquidation of the bank would lead to substantial losses for the State and increase borrowing costs for the Government and the other Irish banks.

Liquidating the bank immediately or over a one-year period were among a number of options considered by the bank’s senior management and advisers in advance of submitting a five-year restructuring plan to the commission last month under the terms of the €4 billion Government bailout.

Among the other options considered by Anglo for its future were an orderly wind-down over five years, “a far-reaching restructuring” and running the bank as a going concern with major restructuring, which is the preferred option outlined to the EU.

In addition to increasing the borrowing costs of the Government and other Irish banks, Anglo was also advised that in a liquidation, the bank would forgo about €20 billion in bonds from the sale of loans to Nama and the State would have to make up this funding.

A liquidation would also technically result in the triggering of the Government’s bank guarantee, increasing the cost to the State.

State would have major losses if Anglo liquidated - The Irish Times - Thu, Dec 24, 2009