The government of Ireland has decided to break up the nationalized Anglo Irish Bank in order to improve the bank's condition. According to the finance ministry, the failed bank will be divided in to two divisions that are a funding bank and an assets recovery bank. Although the asset recovery division will get a banking license, it will have to focus on managing the existing loans given by the bank.
Meanwhile, the funding bank division will hold all the deposits of Anglo Irish Bank and it will not take part in any new lending. The funding bank will be a standalone bank and it will operate separately from the loan assets division of Anglo and the division will be owned by the finance minister directly.
The deposits in the bank are guaranteed by the government of Ireland. This move has been taken only after a week of the announcement of largest corporate loss for Anglo Irish Bank in the business history of Ireland.
The bank reported a record loss of 8.3 billion euros in the first six months of the current year as fell in to trouble.