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Ireland's banking black hole to be unveiled

The full extent of Ireland's black hole is to be revealed by the Irish Central Bank.

The full extent of Ireland's banking crisis will be unveiled on Thursday by Ireland's Central Bank. The massive losses made by Allied Irish Banks (AIB), Bank of Ireland, and Irish Life & Permanent (IL&P) will be measured through stress tests by the Central Bank to assess the amount of debt accumulated. Results of these tests are expected to find that Irish banks still need around €30bn (£26bn) to remain in business.

The vast proportion of Irish debt is being paid by the taxpayer at the moment, but it is hoped that Permanent TSB, the largest mortgage lender in Ireland, which was not covered by the bank guarantee in 2008, can be used to set a precedent for foreign lenders to accept their share of losses. Banks across Europe provided the billions borrowed and lent by Irish financial institutions to feed the demand for property and development prior to the crash.

Trading on AIB and Bank of Ireland shares has been halted to avoid volatility in the markets caused by investors wildly speculating on the outcome of the stress tests.

Liam McLaughlin is a freelance journalist who has also written for Prospect and the Huffington Post. He tweets irregularly @LiamMc108.