When Irish Eyes Are Not Smiling - Rogue Trader at AIB

Allied Irish Banks suffered a 16% fall in its shareprice Wednesday after it stunned markets by revealing a $750m (£530m) fraud in its US operation Allfirst.

The FBI are anxious to interview foreign exchange dealer, John Rusnack, who allegedly perpetrated the fraud. Apparently interviewed by AIB staff earlier in the week, Rusnack has now disappeared and is believed to be on the run.

AIB are keen to stress that this is no Barings-type scenario and that, despite the huge provision, the group is still profitable and has a strong capital base.

The fall in shareprice now appears to make AIB a potential takeover target, with the Royal Bank of Scotland believed to be waiting in the wings.