The Irish index of shares slipped this afternoon, as heavyweight stocks dragged the market down.
The dip in the Irish market was mirrored across the globe as bank stocks were hit by fears of exposure to Dubai debt.
By 1.12pm, the Iseq had dipped 81.24 points to 2,882.34 down 81.24 points, with financial stocks showing particular weakness during the session.
Allied Irish Bank was one of the hardest hit during trading, slipping 9.2 per cent to €1.38.
Merrion Capital this afternoon estimated that the bank's would need recapitalisation of €4.4 billion to reach an 8 per cent equity tier I ratio.
"Despite having obvious asset disposal options as a source of €2.5 billion of this capital, we see less upside for shareholders than in Bank of Ireland," the broker said in a note.
The broker increased its Nama discount forecast for AIB from 25 per cent to 35 per cent, but said its cumulative credit loss forecast for AIB (2008-2010) was unchanged at €12 billion
Bank of Ireland fell 6.4 per cent to €1.51, on lighter volumes.
Merrion estimated the bank would require a further €2.8 billion in capital to meet the 8 per cent ratio, and said it was reducing its credit loss forecast for Bank of Ireland, forecasting a 27 per cent discount on Nama loans, up from previous forecasts of 18 per cent. It also reduced its cumulative credit loss forecast to €8.3 billion from €9 billion.
Irish Life and Permanent was down 5.3 per cent to €3.57.
Elsewhere on the amrket, CRH fell 2.5 per cent to €17.60. Earlier today, traders said they would "not be surprised" if CRH was to return to the bond market, following Lafarge's raising of €750 million in an issue of 10-year notes on a spread of 220bps.
Airlines were once again mixed. After closing off slightly weaker yesterday, Aer Lingus rose 1.9 per cent by early afternoon to 58 cent. However, Ryanair was down 2.2 per cent to €3.01, despite ending yesterday's session fractionally higher at €3.09.
Smurfit Kappa declined 1.1 per cent to €5.95, while Independent News and media lost 0.9 per cent to 10 cent after a busy day yesterday for stock.