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Not too long ago, Ireland was hailed as the European economic miracle. The country even got full Gladwell treatment (his explanation was the "dependency ratio," Irish women were having fewer babies).

Now we learn that the Irish banking is in a world of trouble.

The bloodletting may be far from over for Ireland’s banks as the wheels come off what was once Europe’s fastest-moving economy.

The government said Jan. 16 it would seize control of Anglo Irish Bank Corp. following a scandal that forced the resignations of its chief executive officer and chairman. Three days later, Brian Goggin, CEO of Bank of Ireland Plc, said he will retire a year early following a bailout announced in December that also included Allied Irish Banks Plc. Bank of Ireland fell as much as 33 percent today in Dublin.

“Nobody can stop what’s happening,” said Ken Murray, CEO of Blue Planet Investment Management in Edinburgh. “It’s going to carry on, and governments are going to have to come up with the capital because the market doesn’t have it.”

It looks like the country is heading towards nationalizing its banks. The housing market continues to be a mess. Betweeen 1997 and 2007, home prices in Ireland rose by fourfold. In the end, the Celtic Tiger didn't have much in the way of teeth.

Posted by edelfenbein at January 21, 2009 10:23 AM