Banking on Irish Nationalization

Ireland now has its own Northern Rock. The nationalization of Anglo Irish Bank marks a new phase in the country's financial crisis -- one in which questions over Ireland's own solvency will become increasingly urgent.
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The Irish government will be determined to do whatever it can to avoid nationalizing the remaining large banks. The Irish banking system's total assets are equivalent to two times the country's gross domestic product. Bringing all those liabilities onto the country's balance sheet would overwhelm the public finances, raising doubts over Ireland's creditworthiness. The cost of insuring Irish state debt rose to more than 250 basis points following the Anglo Irish news.