Mr Lenihan says no country could contemplate the failure of an institution the size of Anglo Irish The Irish central bank has said bailing out Anglo Irish Bank will cost up to 34bn euros ($46bn; £29bn) under a worse case scenario.
It said bailing out Anglo Irish would cost 29.3bn euros under a “base” scenario, but it could cost another 5bn euros in a “stress scenario”.
Last month, the cost of the bail out was estimated at between 22-25bn euros.
The central bank also said Allied Irish Bank would need to raise 3bn euros before the end of the year.
In an interview with the Financial Times, the Irish finance minister, Brian Lenihan, warned the failure of Anglo Irish Bank would “bring down” the country.
“Because of its size relative to the national balance sheet… no country could contemplate the failure of such an institution.”
The Irish Republic, a member of the eurozone, is struggling to cut its huge public spending deficit.
The country is viewed as one of the weakest economies in the group, despite it taking tough action to cut that deficit.
This week, concern over its economy sent its cost of borrowing on the open markets to a record.
In the interview with the FT, Mr Lenihan stressed that the country’s financial health was better than other peripheral eurozone economies, saying it had borrowing already lined up to service debts and cover public services until the middle of 2011.
“We are not obliged to go to the markets. We are not under a clear and present constraint,” Lenihan was quoted as saying in the paper.
The Irish government has previously rejected speculation that it could have difficulty raising funds and might have to seek help from a huge EU rescue fund set up after the Greek debt crisis earlier this year.
The interest rate on Irish government debt reached 6.791% on Wednesday.
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