Monday, September 15, 2008

Irish banks are bobbing in debt-infested waters

AIB's exposure to residential property developers is around €15bn, Anglo's €7bn and Bank of Ireland's €9bn. For AIB and BOI, those loans are dwarfed by their mortgage business, but even
within the normally safe mortgage market, there is a new layer of loans that is untested in a recession. A proportion of those mortgage loans are for the "buy-to-let" market --
mortgages raised by investors who buy properties and then rent them
out, hoping that the rental income offsets the mortgage costs.

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