AIB has been released from its obligations to reform and implement new management structures at its US subsidiary Allfirst imposed by US regulators following the $691 million (€645 million) fraud.
The agreement was terminated yesterday after the approval of the sale of Allfirst to the US M&T Bank.
The written agreement set out a timetable for action to address the litany of weak controls and management failings that allowed rogue trader John Rusnak to perpetrate the massive fraud over five years.
Details were drawn up after a three-month joint investigation into the fraud by officials from the Federal Reserve Bank in Richmond and the Maryland Commissioner of Financial Regulation.
AIB's deal with M&T is now expected to be sealed on April 1st. Under its terms, AIB will take a 22.5 per cent stake in the bank, which is based in upstate New York. The Irish bank will also receive $886 million in cash, which it will use to buy back its own shares almost immediately.
Allfirst and M&T together will have more than 700 branches in six states and about $50 billion in assets.
