TIMELINE - Events leading to Anglo Irish Bank nationalisation

The following is a timeline of key events leading up to the government's decision to nationalise Anglo Irish Bank ANGL.I

February 2007

Irish bank shares hit record highs, having trebled in value since the start of the decade, driven by the "Celtic Tiger" economic boom which helped transform Ireland from one of western Europe's poorest countries into one of the world's wealthiest.

March 2007

Irish house prices fall for the first time in five years, marking the beginning of a steady and sharp decline in the country's bank shares as fears mount over the extent of their exposure to a once booming property market.

February 6, 2008

Irish Life & Permanent (IPM.I) Chief Executive Denis Casey says sharp falls in Ireland's banking stocks have been a "huge over-reaction" given the resilience and sound fundamentals of Ireland's economy and banks.

May 7, 2008

Anglo Irish Bank ANGL.I posts a 15 percent rise in first-half earnings and says it expects the same rate of growth for the full year.

May 21, 2008

Bank of Ireland (BKIR.I) becomes the first of Ireland's leading banks to hint profits may fall, responding to the worsening economic slowdown at home and the deepening credit crisis globally.

July 30, 2008

Allied Irish Banks says first half earnings fell 4 percent and warns of a 10 percent drop for the full year but offers shareholders a chunky dividend hike that it says reflects the bank's capital strength.

September 25, 2008

Ireland becomes the first euro zone country to slide into recession in 2008, with economic activity in the former "Celtic Tiger" at its weakest in a quarter of a century after its property bubble burst.

September 30, 2008

Ireland becomes one of the first countries to respond to the Lehman Brothers collapse with a guarantee covering 400 billion euros of liabilities at six Irish-owned banks. The package is later increased to 485 billion euros (435 billion pounds) to cover foreign-owned banks with significant operations in Ireland.

October 14, 2008

The Irish government hikes taxes and reins in spending in an emergency budget and predicts its budget deficit risks smashing EU rules.

November 5, 2008

Allied Irish Banks says it plans to bolster its capital without diluting existing shareholdings by revising dividend payments and disposing of assets if necessary.

November 13, 2008

Bank of Ireland posts a 34 percent fall in first-half earnings and cancels its cash dividend to shore up its capital position.

November 29, 2008

Irish Finance Minister Brian Lenihan concludes talks with banks, saying state involvement would be weighed on a case by case basis and that the government had not proposed consolidation in the sector.

December 14, 2008

The government responds to further steep falls in shares in Ireland's banks by saying it will invest up to 10 billion euros recapitalising them.

December 16, 2008

A senior executive at Allied Irish Banks repeats that the bank does not need extra capital.

December 18-19, 2008

Anglo Irish Bank's chairman Sean FitzPatrick and chief executive David Drumm resign within hours of each other over a scandal involving loans of around 87 million euros.

December 21, 2008

The Irish government says it will inject 5.5 billion euros into the country's three main banks, leading to the nationalisation of Anglo Irish Bank.

January 15 2009

The Irish government says it will nationalise a "weakened" Anglo Irish Bank.

(Reporting by Paul Hoskins; Editing by Carmel Crimmins and Andrew Callus)