Foundering Irish bank now public property

Ireland’s government moved Thursday to take over Anglo Irish Bank, declaring that a plan to inject money into the troubled lender was not enough to secure the future of an institution battered by the collapse of the boom known as the Celtic Tiger.

Ireland’s Department of Finance said the bank, which had soared for more than a decade in Ireland’s unprecedented boom, had a weakened funding position. Unacceptable practices, including a recent loan scandal, had caused serious damage to Anglo Irish’s reputation, making a planned recapitalization program insufficient.

“Therefore, the government must move to the final and decisive step of public ownership,” the statement said.

The bank, which was heavily exposed to the property and construction markets, is a visible casualty of the setbacks in an economy once among Europe’s brightest stars.

The boom of 1994-2007 fueled a sizzling property market -- which buckled when hit by the shock waves of the subprime crisis in the United States. International investors began to weigh the exposure of Ireland’s banks to property developers, questionable loans and inflated land prices.

Anglo Irish Bank had been set to be part of a multibillion-dollar bailout package revealed last month.