Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?

toxic avenger wrote:

McWilliams is saying that it would be better for them to be nationalised than for them to fall into the hands of private equity funds. And he is correct. Handing control of Irish banking to short-termist profiteers and asset-strippers is one sure fire way to bugger your economy for decades to come. Trade unions in Britain have been on about this for years, and have been derided for stating what's as plain as day. Their track record is asset-stripping and selling off the skeleton for a quick buck, with thousands left unemployed and workable industries and businesses which actually produce things destroyed for ever. McWilliams points to the problems faced by investors who put their money in to PEFs but can't get it out for twelve years, often having to cash in for only a 50% return when they get into financial difficulties. Thus even the investors in PEFs are victims of the PEFs. Though I find it hard to summon up sympathy, given the lack of concern for morality shown by these people when they stick the money in. My inner Stalinist says re-open the gulags...

Agreed, except my inner Trotskyist says nationalise the banks without compensation under workers control...

toxic avenger wrote:

McWilliams is saying that it would be better for them to be nationalised than for them to fall into the hands of private equity funds. And he is correct. Handing control of Irish banking to short-termist profiteers and asset-strippers is one sure fire way to bugger your economy for decades to come. Trade unions in Britain have been on about this for years, and have been derided for stating what's as plain as day. Their track record is asset-stripping and selling off the skeleton for a quick buck, with thousands left unemployed and workable industries and businesses which actually produce things destroyed for ever. McWilliams points to the problems faced by investors who put their money in to PEFs but can't get it out for twelve years, often having to cash in for only a 50% return when they get into financial difficulties. Thus even the investors in PEFs are victims of the PEFs. Though I find it hard to summon up sympathy, given the lack of concern for morality shown by these people when they stick the money in. My inner Stalinist says re-open the gulags...

And my inner anarchist says we should all be our own bankers . I'm no economist but it seems that the government are making a huge mistake focusing on attracting what is actually very expensive inward 'investment'. We're a samll country with plenty of basic resources for everyone to get by at a reasonable standard of living. Shouldn't we be investing in sustainable indiginous industry and maufacture? Isn't it important to see what we can do for ourselves independently of any other country or region - and work towards that as much as possible? We'd be far less vulnerable. We might not have many filthy rich people around (ideally none at all) but we'd be far better insured against the raging storms of the international money markets. Why don't we just build a real economy again?

Aragon wrote:

toxic avenger wrote:

McWilliams is saying that it would be better for them to be nationalised than for them to fall into the hands of private equity funds. And he is correct. Handing control of Irish banking to short-termist profiteers and asset-strippers is one sure fire way to bugger your economy for decades to come. Trade unions in Britain have been on about this for years, and have been derided for stating what's as plain as day. Their track record is asset-stripping and selling off the skeleton for a quick buck, with thousands left unemployed and workable industries and businesses which actually produce things destroyed for ever. McWilliams points to the problems faced by investors who put their money in to PEFs but can't get it out for twelve years, often having to cash in for only a 50% return when they get into financial difficulties. Thus even the investors in PEFs are victims of the PEFs. Though I find it hard to summon up sympathy, given the lack of concern for morality shown by these people when they stick the money in. My inner Stalinist says re-open the gulags...

And my inner anarchist says we should all be our own bankers .

I like that.
I remember in the mid 1990s when the INternet was just taking off, many futurists predicted the demose of the banks as people would transfer moeny between them without the parasitic middleman.
In the years that followed, I reflected sadly that due to security concerns and the constant human drive to centralise, this desire was unlikely to materialise.
Now in the wake of the "mess" on our hands, it would be interesting if we could revive the debate. For me the banks and the centralised state are two faces of the same coin, or rather two heads of the monster.

Aragon wrote:

And my inner anarchist says we should all be our own bankers .

Mutuality is the way to go, whether it be building societies like the British Nationwide, credit unions, or co-operative banks where the customers are shareholders (which is also really mutual).

Respvblica wrote:

Aragon wrote:

toxic avenger wrote:

McWilliams is saying that it would be better for them to be nationalised than for them to fall into the hands of private equity funds. And he is correct. Handing control of Irish banking to short-termist profiteers and asset-strippers is one sure fire way to bugger your economy for decades to come. Trade unions in Britain have been on about this for years, and have been derided for stating what's as plain as day. Their track record is asset-stripping and selling off the skeleton for a quick buck, with thousands left unemployed and workable industries and businesses which actually produce things destroyed for ever. McWilliams points to the problems faced by investors who put their money in to PEFs but can't get it out for twelve years, often having to cash in for only a 50% return when they get into financial difficulties. Thus even the investors in PEFs are victims of the PEFs. Though I find it hard to summon up sympathy, given the lack of concern for morality shown by these people when they stick the money in. My inner Stalinist says re-open the gulags...

And my inner anarchist says we should all be our own bankers .

I like that.
I remember in the mid 1990s when the INternet was just taking off, many futurists predicted the demose of the banks as people would transfer moeny between them without the parasitic middleman.
In the years that followed, I reflected sadly that due to security concerns and the constant human drive to centralise, this desire was unlikely to materialise.
Now in the wake of the "mess" on our hands, it would be interesting if we could revive the debate. For me the banks and the centralised state are two faces of the same coin, or rather two heads of the monster.

The technology is more than ready for this. All we need is for our wages to be paid into accounts just as they are at the moment and thereafter we can easily control who we pay/save with etc - we dont need banks for any of that. But we'd still need places to convert our electronic money into cash when needed. There'd be problems with that - what do you think? How could it work?

Aragon wrote:

Respvblica wrote:

Aragon wrote:

toxic avenger wrote:

McWilliams is saying that it would be better for them to be nationalised than for them to fall into the hands of private equity funds. And he is correct. Handing control of Irish banking to short-termist profiteers and asset-strippers is one sure fire way to bugger your economy for decades to come. Trade unions in Britain have been on about this for years, and have been derided for stating what's as plain as day. Their track record is asset-stripping and selling off the skeleton for a quick buck, with thousands left unemployed and workable industries and businesses which actually produce things destroyed for ever. McWilliams points to the problems faced by investors who put their money in to PEFs but can't get it out for twelve years, often having to cash in for only a 50% return when they get into financial difficulties. Thus even the investors in PEFs are victims of the PEFs. Though I find it hard to summon up sympathy, given the lack of concern for morality shown by these people when they stick the money in. My inner Stalinist says re-open the gulags...

And my inner anarchist says we should all be our own bankers .

I like that.
I remember in the mid 1990s when the INternet was just taking off, many futurists predicted the demose of the banks as people would transfer moeny between them without the parasitic middleman.
In the years that followed, I reflected sadly that due to security concerns and the constant human drive to centralise, this desire was unlikely to materialise.
Now in the wake of the "mess" on our hands, it would be interesting if we could revive the debate. For me the banks and the centralised state are two faces of the same coin, or rather two heads of the monster.

The technology is more than ready for this. All we need is for our wages to be paid into accounts just as they are at the moment and thereafter we can easily control who we pay/save with etc - we dont need banks for any of that. But we'd still need places to convert our electronic money into cash when needed. There'd be problems with that - what do you think? How could it work?

Why not consider abolishing money, if you want to abolish banks?

Aragon wrote

Quote :

The technology is more than ready for this. All we need is for our wages to be paid into accounts just as they are at the moment and thereafter we can easily control who we pay/save with etc - we dont need banks for any of that. But we'd still need places to convert our electronic money into cash when needed. There'd be problems with that - what do you think? How could it work?

Cactus Flower wrote

Quote :

Why not consider abolishing money, if you want to abolish banks?

Aye, and there's the rub! I had an intersting discussion with a bank manager a while ago who said the banks were hoping they could evetually do exactly that but that they anticipated ferocious resistance to the idea. This was a couple of years ago - before the banking catastrophe hit and so the idea of trusting these institutions to manage saved/stored wealth that could not be realised in some tangible form is even more unlikely now than before. If we did away with money, it's is entirely possible that government and banking institutions could unilaterally justify absorbing savings as an 'unavoidable necessity' intimes of crisis. Maybe the 'Letts Scheme' wasn't such a laughable idea after all!

If you abolished money, you couldn't have and wouldn't need savings.

cactus flower wrote:

If you abolished money, you couldn't have and wouldn't need savings.

Aragon wrote:

Respvblica wrote:

Aragon wrote:

toxic avenger wrote:

McWilliams is saying that it would be better for them to be nationalised than for them to fall into the hands of private equity funds. And he is correct. Handing control of Irish banking to short-termist profiteers and asset-strippers is one sure fire way to bugger your economy for decades to come. Trade unions in Britain have been on about this for years, and have been derided for stating what's as plain as day. Their track record is asset-stripping and selling off the skeleton for a quick buck, with thousands left unemployed and workable industries and businesses which actually produce things destroyed for ever. McWilliams points to the problems faced by investors who put their money in to PEFs but can't get it out for twelve years, often having to cash in for only a 50% return when they get into financial difficulties. Thus even the investors in PEFs are victims of the PEFs. Though I find it hard to summon up sympathy, given the lack of concern for morality shown by these people when they stick the money in. My inner Stalinist says re-open the gulags...

And my inner anarchist says we should all be our own bankers .

I like that.
I remember in the mid 1990s when the INternet was just taking off, many futurists predicted the demose of the banks as people would transfer moeny between them without the parasitic middleman.
In the years that followed, I reflected sadly that due to security concerns and the constant human drive to centralise, this desire was unlikely to materialise.
Now in the wake of the "mess" on our hands, it would be interesting if we could revive the debate. For me the banks and the centralised state are two faces of the same coin, or rather two heads of the monster.

The technology is more than ready for this. All we need is for our wages to be paid into accounts just as they are at the moment and thereafter we can easily control who we pay/save with etc - we dont need banks for any of that. But we'd still need places to convert our electronic money into cash when needed. There'd be problems with that - what do you think? How could it work?

Would the government provide these accounts. I'm just think about if I was to pay X for something, how could I transfer the money?
It could be done like the Internet or DNS with a hierarchical structure.
pay aragon@clon.cork.ie or respvblica@santjoan.alicante.es
Would it be secure?

Does anyone have any views on today's proposal, involving Irish and Foreign private equity investment along with Government?

If government take the main controlling stake, is this not the best of the miserable available options - bar outright nationalisation ?

It appears to be the least worst option.

Although some of the investors are the pension funds controlled by the bank group themselves. Which seems dodgy.
Using Irish Life to invest in BOI and BOI Asset Management to invest in PTSB doesn't seem smart when the recapitalisation may not achieve much anyway. There is a feeling in the US that their bailiout achieved nothing, no?

Let the banks eat cake and die. We should force the government to do the following:

Each county council can set up a bank where people resident in that county can deposit the money there. The money deposited can only be invested in precious metals such as Gold and platinum.

The bank staff must comprise of three people, no more, no less who will
be paid according to what the depositors decide at the AGM although it
can have bounds (€20,000 to €40,000 for example). One will be the technology operator, another the financial operator and the third would be the manager. The manager would be elected by the depositors at the AGM and would appoint the other two. There would be only one outlet in the county town and transactions would be run entirely over the internet. Fraud or misconduct on the part of the bankers would have an automatic gaol sentance. These will not be public servant in the usual sense with state pensions and holidays.
In the beginning the government can subsidse the network and e-business infrastructure, and perhaps the salaries until the bank charges could pay for it.

The system would be slow but sure and honest.

Financing the commercial banks or nationalising them makes my stomach turn. I considered it, and agreed with FG policy on this for a while as being practical but when I look deep into my own heart I couldnt agree with it. Like Lisbon its morally wrong!

cactus flower wrote:

Does anyone have any views on today's proposal, involving Irish and Foreign private equity investment along with Government?

If government take the main controlling stake, is this not the best of the miserable available options - bar outright nationalisation ?

This is from breaking news a little while ago ?

Quote :

The Minister for Finance has been presented with a proposal that could see the investment subsidiaries of a number of Irish and international banks recapitalise the Irish banking system.

It would see them invest €2bn in the six banks covered by the Government's guarantee scheme.

An equal amount of investment would be needed from the Government, or possibly the National Pension Reserve Fund.

If there's a bank out there which will buy up two or three of them at knockdown prices then the consequences I suppose would be that they'd be consolidated into one or a department of a bigger bank e.g. HSBC Ireland (if HSBC had the interest). Loads of people would lose their jobs over a period wouldn't they ? More on the dole - if there's any dole left now that Rody Molloy is getting the equivalent of about 50 years future dole in one envelope not including his pension.

I don't know what would happen. The banking system will shed jobs, people who have no jobs will be up the creak trying to pay their mortgages, they'll be looking for social welfare too - will Rody Molloy cough up a few bob to help a starving neighbour ? Not after he has been forced to move to Eastern Europe there with the rioting. More money out of the Exchequer... Ireland won't get any help from Europe in two years as more of this type of thing accumulates.

IMF loans needed. Prices of everything will rise enormously to finance Iceland-type interest at 15%. Massive hunger will ensue worse than the Great Famine. Out of pride, the Irish people still won't form a community in order to feed themselves and Respvblica's idea above won't work because there's no precious metals here really. Rody Molloy will still have some money in his account while he's listening to the bad news over the internet. By the way, only one or two media outlets exist on the internet as the Collapse has hit so hard that Vulture Capitalists have taken and stripped the assets of the hiterto Eircom owned up until recently by the now utterly bankrupt Babcock and Brown. Broadband costs are exorbitant also in order to pay for the IMF loans and only the super-rich have it and they are not fans of free speech, they are fans of the VCs who own the network.

Rody Molloy must not be allowed to get that half a million i tell ye.

Respvblica - history teaches us that the state must utilise the techniques which private persons have devised. Trying to take over an area of private enterprise and devising new techniques simply does not work.

Examples of such failures would be Napoleon's efforts to change the education system in France. Eventually he had to revert to to the old systems and even re-employed a lot of the old personnel such as the monks. Another example is where the Nazis tried to introduce total socialism in the run up to WWII. It didn't work so they had to go back to the capitalist ways to raise money to finance their war preparations.

Going further than your original point: Whilst you may nationalise the banks they will not function as socialist institutions. It will not give you socialism. It will at most give you state owned capitalism. This is what the Chinese have realised. The "communist" state has dopted the existing proven functioning capitalist techniques.

On the raising of native irish equity, this is welcome. One wonders is it just the bankers playing with other people's money to save their own skin. It seems the government had to produce the spectre of private equity funds (who would have filleted all in the banks from top to bottom) to let the bankers know that there is an alternative to giving in to their unreasonable demands. Before that the bankers seemed to be acting like recapitalisation would be forced on the Government and the bankers could choose their terms. We might even have to let one or two of the banks be filleted by the PEFs and take the hit on the guarantee if it allows us to get a better deal on the rest of the banks.

So we should be learning semaphore to communicate, Auditor #9?

On the whole internet banking thing. It is to be noted that the banks have all been seeking to automate their systems over the last number of years. Lots of people were let go in the process.

Also, afaik, it is a term of the Bank Guarantee that the banks will have to put a lot more effort into developing a quicker and easier to use electronic funds transfer system. We lag far behind most of Europe on this. The estimate on how much our use of paper instruments (cheques, drafts etc) costs us is something like €1billion pa or 1% GDP. Not sure which but it is massive.

Zhou_Enlai wrote:

Respvblica - history teaches us that the state must utilise the techniques which private persons have devised. Trying to take over an area of private enterprise and devising new techniques simply does not work.

Examples of such failures would be Napoleon's efforts to change the education system in France. Eventually he had to revert to to the old systems and even re-employed a lot of the old personnel such as the monks. Another example is where the Nazis tried to introduce total socialism in the run up to WWII. It didn't work so they had to go back to the capitalist ways to raise money to finance their war preparations.

Going further than your original point: Whilst you may nationalise the banks they will not function as socialist institutions. It will not give you socialism. It will at most give you state owned capitalism. This is what the Chinese have realised. The "communist" state has dopted the existing proven functioning capitalist techniques.

On the raising of native irish equity, this is welcome. One wonders is it just the bankers playing with other people's money to save their own skin. It seems the government had to produce the spectre of private equity funds (who would have filleted all in the banks from top to bottom) to let the bankers know that there is an alternative to giving in to their unreasonable demands. Before that the bankers seemed to be acting like recapitalisation would be forced on the Government and the bankers could choose their terms. We might even have to let one or two of the banks be filleted by the PEFs and take the hit on the guarantee if it allows us to get a better deal on the rest of the banks.

So you think that the PEF idea was floated to threaten the banks with the bogeyman, with no real intention behind it? If so, I'm both relieved and impressed. If Lenihan can play poker like that, there might be hope. Assuming, of course, that the ruse is bought...

toxic avenger wrote:

So you think that the PEF idea was floated to threaten the banks with the bogeyman, with no real intention behind it? If so, I'm both relieved and impressed. If Lenihan can play poker like that, there might be hope. Assuming, of course, that the ruse is bought...

There's no point in bluffing if you don't have the balls to follow through. I reckon he would be willing to let the vulture capitalists at one of them if necessary. We would then be relying on the UK banks to compete with the remaining dominant Irish Bank which he should be able to recapitalise on his terms.

Zhou_Enlai wrote:

toxic avenger wrote:

So you think that the PEF idea was floated to threaten the banks with the bogeyman, with no real intention behind it? If so, I'm both relieved and impressed. If Lenihan can play poker like that, there might be hope. Assuming, of course, that the ruse is bought...

There's no point in bluffing if you don't have the balls to follow through. I reckon he would be willing to let the vulture capitalists at one of them if necessary. We would then be relying on the UK banks to compete with the remaining dominant Irish Bank which he should be able to recapitalise on his terms.

I'd like to be the first to nominate Mr. Fingleton and his private fiefdom for sacrifice in the national interest...

Zhou_Enlai wrote:

Respvblica - history teaches us that the state must utilise the techniques which private persons have devised. Trying to take over an area of private enterprise and devising new techniques simply does not work.

Examples of such failures would be Napoleon's efforts to change the education system in France. Eventually he had to revert to to the old systems and even re-employed a lot of the old personnel such as the monks. Another example is where the Nazis tried to introduce total socialism in the run up to WWII. It didn't work so they had to go back to the capitalist ways to raise money to finance their war preparations.

Going further than your original point: Whilst you may nationalise the banks they will not function as socialist institutions. It will not give you socialism. It will at most give you state owned capitalism. This is what the Chinese have realised. The "communist" state has dopted the existing proven functioning capitalist techniques.

On the raising of native irish equity, this is welcome. One wonders is it just the bankers playing with other people's money to save their own skin. It seems the government had to produce the spectre of private equity funds (who would have filleted all in the banks from top to bottom) to let the bankers know that there is an alternative to giving in to their unreasonable demands. Before that the bankers seemed to be acting like recapitalisation would be forced on the Government and the bankers could choose their terms. We might even have to let one or two of the banks be filleted by the PEFs and take the hit on the guarantee if it allows us to get a better deal on the rest of the banks.

What is happening is without historical precedent. There is a catastrophic systems failure going on. We have no prior experience of a globalised financial and economic slump of this nature, in which the world's economies are so deeply interconnected. In a situation that is new, it must be the case that new solutions will have to be devised.

I think you must know more about French education than I do, but I had cause to read a bit up recently, and the French education system is deeply founded on the principles of the revolution, Liberty, Fraternity and Equality and is a strictly secular system. Hitler jailed and killed socialists, trade unionists and communists, was backed by private enterprise. The Nazis were never remotely connected to socialism. Hitler's rise was sponsored by the German military, in response to the workers uprisings of 1917 and what they perceived to be the threat of communism.

I think your guess that this is the bankers playing with other peoples' money to save their own skin sounds like the reality. If Lenihan has been playing the game you suggest it is a clever one. The idea that 4 billion euro would go any significant way to make the system solvent is for the birds of course, but the vital thing is that the Banking system remains in Government control. The only things we have on our side are what is left of the pension fund and our relatively low national debt. As personal indebtedness is the second highest in the EU, the spectre of asset stripping bank management is horrendous and to be avoided at all costs. Much of the debt relates to property purchase. We do not know, but there is some possibility that a future return of inflation would reduce that burden.

There is no sign yet of an end to this, in fact it looks more as if we are in the beginning of something. I am of the hope for the best and prepare for the worst school. I think government should ensure a decent stockpile of food and energy, and we should all be prepared to hunker down and act together co-operatively, and on an equal basis.

Zhou,
I too understand that state intervention can make things worse, but my idea wouldnt be socialist. There is no nationalisation of banking and Private banks would continue to exist. My model (which was partly inspired by Gene Kerrigan's 26 national branches in 26 counties idea which was in the Sindo a couple of weeks back) would merely offer the people an alternative - a more stable and secure alternative, as well as more accountable alternative, to what is on offer.

If AIB and BoI offer better lending and interest for savers, then there´s no problem. Freedom of choice remains and the government spending and intervention remains minimal, and ideally zero. In fact all it requires is some legislation and some money to start with, and its a lot less than is being proposed for bank recapitalisations. (Now that kind of subsidy does sound socialist interference!)

Remember the county banks would be directly accountable to their depositors who are limited to residents. By stipulating how the bank can invest(just in gold) and by its local nature, global ambition and risk is taken out of the picture. The risk takers are free to carry on with other instituations or by themselves, but the county bank answers to no one but the law and the depositors in that county. Its not capitalist, but it aint socialist either.

http://www.irishtimes.com/newspaper/frontpage/2008/1129/1227910354473.html

Government is now talking about some form of recapitalisation or bail out of the banks, but is struggling to get any agreement on mergers or rationalisation.

There was some thought last week that Lenihan was playing a cute game in threatening the banks with a Private Equity Fund (asset stripping) takeover. It looks as though they are not being had that way.

Having Guaranteed the banks in Ireland, has the Government blown all the leverage it had in pursuading the Banks to acede to Government plans and policies?

At this stage, surely there should be an early end to the Guarantee, to kick in when a recapitalisation process, with Government effectively taking control of the banks, is put in place?

Quote :

Spring and Dukes asked to serve on bank boards
Sunday, November 30, 2008 By Pat Leahy, Political Editor
The government has approached a number of former politicians to act as directors representing the public interest on the boards of the banks covered by the government’s guarantee scheme.
..

Under the banking guarantee legislation, the Minister for Finance can nominate ‘‘directors representing the public interest’’ to the boards of AIB, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, the EBS, Irish Nationwide Building Society and Postbank.

http://www.thepost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=nav-qqqid=37946-qqqx=1.asp

The paper is also saying that Lenihan has 4€ billion in cash ready to recapitalise the banks. It is estimated that 10 billion will be needed - some of that made up of private funding. AIB say they don't need it ... resisting the influence of public figures on their boards ?

http://www.thepost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqs=news-qqqid=37950-qqqx=1.asp

That is worth quoting Auditor - it seems to be saying that less than 2 billion of the Pensions Fund is accessible - the rest of 13 billion being held in equities that would be collapsed by a fire sale - sure there might be a fire sale anyway the way things are?

It looks more and more as if the jackals are going to get the Banks, with a small Government contribution as lip service. The government can quickly find some €4 billion in funding, if it decides to invest state cash in the banks.

Quote :

Minister for Finance Brian Lenihan indicated for the first time this weekend that he would consider investing state funds to recapitalise the banks, in tandem with private sector finance. A joint investment plan involving private and public sector cash is now on the cards.

Lenihan indicated that state cash would come from the National Pension Reserve Fund, held by the National Treasury Management Agency to meet future state pension liabilities.

The pension fund has more than €1.5 billion in cash and in excess of €2 billion in readily saleable government bonds, meaning that Lenihan could quickly access close to €4 billion from this source.

The rest of its €15 billion plus in assets is mainly held in equities, but the government would be loath to engage in a quick sale of these holdings at the current depressed market values.

While estimates differ, most market analysts believe that a minimum of €10 billion will need to be invested in recapitalising the banking system. Lenihan has indicated clearly that he will look to private funding to make up the balance.

Already, the Mallabraca consortium, funded by big US and Middle Eastern investors, has indicated that it has €5 billion available to invest and has entered talks with the Bank of Ireland.

Other US funds, including Texas Pacific and KKR, have also made approaches. Senior government sources also say that an approach by Irish investing institutions, under the aegis of the Irish Association of Investment Managers, is being taken seriously.

This group has said it has €2 billion available if an attractive investment opportunity emerges. This figure could grow, as it is understood that the group has also had approaches from US and British institutional investors and from Irish wealth managers interested in investing the cash of some wealthy clients.

The consortium has also told the government that it believes smaller investors could participate through some kind of special investment fund. As the competing investors jockey for position, the banks will come under increasing pressure to clarify their intentions.

Bank of Ireland, in particular, by indicating publicly that it had been approached, will be under pressure to conclude a deal. Irish Life & Permanent, meanwhile, has made it clear that it will resist any government pressure for it to merge with Bank of Ireland under a recapitalisation plan.

If Bank of Ireland accepts new cash, then AIB may come under pressure to do likewise. While AIB has argued strongly that it does not need new capital, it may be prepared to accept investment by way of preference shares, which would not dilute existing shareholders.

AIB is also believed to be actively examining whether it could take on any of the smaller institutions, which might provide a vehicle for some kind of capital investment.

The Bank ad has a certain irony, so I'm leaving it in. At the same time, there is a report in the SBP that major Irish Pension Funds are going to collapse wiping out the lifetime savings of thousands of people to the tune of 20 or 30 billion.[/center]