Irish bonds continued their fall this week, pushing the premium that investors demand to lend money to Ireland to "ridiculous" levels, central bank Governor Patrick Honohan was quoted as saying on Thursday.
The spread between Irish and rock-solid German bond yields rose to 299 basis points today, up from 297bps yesterday. It has already risen by 75bps this week, on concerns that some of the nationalised Irish banks would need more funds to overcome their multi-million euro losses, linked to the burst of the country's real estate market.
In an interview with the Daily Telegraph, Honohan said the cost of recapitalising the Ireland's banks is 25bn euros, or 15 to 16% of Gross Domestic Product, and "it is nearly all the result of Anglo Irish Bank".
The cost to insure $10m of Irish government bonds rose by $12,000 to $282,000, according to data from Markit.
