DEBIAN, Ireland (Reuters) – Irish bank UBS is no more a lender to Ireland after being forced to take a “deferred” debt of nearly €1 billion in the wake of the global financial crisis, Irish authorities said on Friday.
The decision came after UBS said it was in breach of rules in Ireland’s capital markets regulations to fail to fully repay the loans to its lenders, including its former employer, the National Bank of Ireland.UBS was forced to exit its troubled European and U.S. business following a wave of defaults in the run-up to the global recession and was forced out of the United Kingdom by the government in October 2011.
It also became the first financial institution in Ireland to be forced to buy back shares in a private company when it defaulted on its loans.
U.S., Irish regulators agree to work together in efforts to prevent another financial crisisThe bank was forced into a rescue deal by the U.K. government in the aftermath of the financial crisis in 2008, which led to its collapse and subsequent sale to rival Royal Bank of Scotland in 2013.
A government-appointed monitor has since recommended that UBS be put on a government-backed bailout.
The European Central Bank is also helping to find a resolution for the bank, which is also part of the European Banking Authority.
The bank said it would continue to be a lender of last resort, and said it had taken measures to address its own regulatory compliance.UBIE, the world’s largest insurer, is also a lender in Ireland and has been granted a new life in the country, a senior bank executive said.
The UBS deal is a victory for UBIE and a relief to the Irish taxpayer, it added.
Unauthorized foreign lenders have been a problem in Ireland, where the financial sector is largely dominated by foreign-owned banks.