Anglo Breaks Records For Losses

Another week, and another tranche of bad news from Anglo Irish Bank.

The nationalized bank has reported the worst-ever half-year results in Irish corporate history - running up losses of €8.2bn in the first six months of this year.

It's on course to lose at least another €6bn before the end of the year as it continues to transfer toxic property loans to NAMA.

That will probably break Anglo's own record for the biggest annual loss ever recorded by an Irish business.

Last year, Anglo recorded the worst losses among all of the world's banks - quite something for a small bank in a small economy - and seems on course to repeat that feat in 2010.

These are not records that any company - least of all one owned by the State - wants to put their name beside.

Taxpayer support for the "zombie" bank has now reached €22.88bn according to the bank's chief executive, Mike Aynsley.

Mr Aynsley says that if the remaining loans are transferred to NAMA at the same discount as some of the loans already moved, then the total cost would be around €25bn.

But international analysts like Standard and Poor's believe the final bill could run up to more than €35bn - equivalent to one quarter of Ireland's entire economy.

Initially, when tax-payers money was being pumped into Anglo, it was being sold as an "investment" but now the government concedes the money will not be coming back.

And the political debate has moved to how the bank can be closed down with the least cost to the Exchequer possible.

The government is playing down a possible rift between the coalition partners on the issue, after the Green Party said it was in favour of a speedy winding down of Anglo.

"The Government is united in its determination in relation to the resolution of the Anglo Irish Bank issue - that it must be done at the least practicable cost to the taxpayer, and in a way that gives finality," a statement said.

Discussions are continuing with EU authorities over plans to split Anglo into a "good" and "bad" bank.

The "good" one would take the profitable 20% from Anglo's loan book and seek to continue operating as a solvent business.

The "bad" one would handle the dumping of failed loans.

The man on the street would prefer if Anglo was closed down altogether, and the State cut its losses as soon as possible.

But the trouble is that many of the bondholders who are owed money by Anglo are the same ones who buy Irish bonds.

If state-owned Anglo defaults, then it could have a huge negative effect, sending the cost of borrowing through the roof for the Irish government.

Options are very limited for the government in dealing with Anglo, and the EU and European Central Bank will have a crucial say in what happens.

That's because the implications of letting Anglo fail could have reverberations far beyond Irish shores.

In any event, when the New York Times is asking "Can one bank bring down a country?" in the first line of its report on the Anglo results, you know the stakes are high.