Banking crisis in Ireland heightens fears of sovereign default

Ireland’s sovereign bond yields spiked again in early November amid uncertainty over the total cost of government support for the financial sector. Fears are growing that the former ‘Celtic Tiger’ will need EU assistance to stay afloat.

Shamrock shambles: The 'Irish situation' is giving bond investors cause for concern

Ireland’s banking crisis is causing concern to investors, with fears rising that the government or Irish banks will be forced to tap the €440 billion European Financial Stability Facility.

The country's difficulties have been reflected in spiralling sovereign bond yields and CDS spreads. On November 8, Ireland’s five-year sovereign CDS reached a record 599bp. Three days later, the yield on the country’s benchmark 10-year bond hit 8.891%, and is fast approaching the yields on Greek