Allied Irish Banks said Thursday that it would centralize currency trading operations and appoint an "eminent person" from the financial industry to investigate how internal safeguards failed to stop an employee at its U.S. subsidiary from secretly losing $750 million.
Ireland's largest bank also postponed a $365-million bond sale planned for this week, after Wednesday's disclosure that a trader lost $750 million at its Allfirst Bank in Baltimore.
Allied Irish has alleged that John M. Rusnak, part of Allfirst Bank's foreign currency trading section, piled up the losses last year. No charges have been filed against Rusnak, 37, but he and four unidentified employees in Allfirst's treasury operations remained suspended Thursday amid investigations by the FBI and regulators.
Rusnak's lawyer, Bruce Lamdin, did not return calls but earlier told The Times that estimates of losses may be "grossly exaggerated." Allied Irish, however, said in a statement after a crisis meeting Thursday that the bank board has reaffirmed the $750-million loss.
With some analysts describing Allied Irish as a takeover target, the stock rose $1.19 to $20.96 on the New York Stock Exchange.