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

Zhou_Enlai wrote:

The longer the debate goes on, the more stress they can create within the cabinet and the more of a wedge they cannot drive between the Government parties.

The letter from Cowen asking them to keep a lid on things has been thrown back in his face.

By Gilmore and Kenny.

It was an understandable move on Cowen's part but he can't be that naive that he didn't expect this response, especially after the way it was handled in the press last night. Maybe it is time for a State of the Nation speech?

"Sure don't we all know the State of the Nation"

Time for a new Government, I think.

But is it time for a general election?


Customers wtih loans 7,000, including Irish 5,000
300,000 retail (missed the Irish number but relatively small)
12,000 corporate depositors including 3,500 Irish

"The State will not let any systemically relevant institution fail."

Kate P wrote:

But is it time for a general election?


Customers wtih loans 7,000, including Irish 5,000
300,000 retail (missed the Irish number but relatively small)
12,000 corporate depositors including 3,500 Irish

Irish retail customers 72,000.

No, but neither is it a good time to carry on with a Government that doesn't have the confidence of the people in Ireland or of the rest of the world.

Here comes Richard Bruton. It all hangs on this, I think...

cactus flower wrote:

No, but neither is it a good time to carry on with a Government that doesn't have the confidence of the people in Ireland or of the rest of the world.

I am sorry, but while the Govt does not inspire confidence, most definitely, neither does the Opposition.

Bruton wants to slow the debate down. Can they stall this bill for more than a bloody day ?

I doubt that would calm the markets

It's not going to happen, Audi. There was no appetite to have a longer debate.

Frankly, I wonder if all trading in all bank shares should be suspended worldwide while a team of seriously forensic accountants is sent in.

Who'd have the cojones to make that call though??

expat girl wrote:

cactus flower wrote:

No, but neither is it a good time to carry on with a Government that doesn't have the confidence of the people in Ireland or of the rest of the world.

I am sorry, but while the Govt does not inspire confidence, most definitely, neither does the Opposition.

Alright then, a random selection of Pinsters and members of the WSM.

That's pretty radical, expat girl. Would you suggest that trading in all Irish bank shares should have been suspended when the nationalisation of Anglo Irish was announced?

cactus flower wrote:

expat girl wrote:

cactus flower wrote:

No, but neither is it a good time to carry on with a Government that doesn't have the confidence of the people in Ireland or of the rest of the world.

I am sorry, but while the Govt does not inspire confidence, most definitely, neither does the Opposition.

Alright then, a random selection of Pinsters and members of the WSM.

Who is the TD speaking now?

Kieran O'Donnell, Limerick East.

Interesting point he made about the percentage of staff payment made up of bonuses. 56% but 61% of the CEO's.

Bruton made some good points about transparency and relationship frameworks but I cannot see how such detailed and complex structures could be framed in legislation in the required time-frame. Lenihan looked like he was taking Bruton seriously but that he disagreed with him.

The PWC report is a red herring. There is no way it is comprehesive. We cannot publish, not because of the horrors it contains but because of the lack of horrrors.

Quote :

The PWC report is a red herring. There is no way it is comprehesive. We cannot publish, not because of the horrors it contains but because of the lack of horrrors.

Where are the horrors, Zhou? Or have they been quantified yet?

I don't believe they have been quantified in full. I reckon PWC just asked for a selection of loan files and for info on who was servicing their loans and who wasn't. The full extent cannot be told. The banks have engaged internal hit squads themselves to identify and root out problems. What we have here is a classic "known unknown". The important thing is to assess whether more accurate information is required to make a proper decision. I don't believe more information is required or is ascertainable. Like Schroedinger's cat, the value and quality of the loans/assets change day by day. I believe that there is sufficient info to make decisions now and the market has made its decision. The Government now needs to minimise the impact of the predicament by stabilising banks and expenditure in an effort to safeguard employment. They need to build a floor across the bottomless pit to support a ladder for the future.

Zhou_Enlai wrote:

I don't believe they have been quantified in full. I reckon PWC just asked for a selection of loan files and for info on who was servicing their loans and who wasn't. The full extent cannot be told. The banks have engaged internal hit squads themselves to identify and root out problems. What we have here is a classic "known unknown". The important thing is to assess whether more accurate information is required to make a proper decision. I don't believe more information is required or is ascertainable. Like Schroedinger's cat, the value and quality of the loans/assets change day by day. I believe that there is sufficient info to make decisions now and the market has made its decision. The Government now needs to minimise the impact of the predicament by stabilising banks and expenditure in an effort to safeguard employment. They need to build a floor across the bottomless pit to support a ladder for the future.

Absolutely right there - the problem is how long can we hold on to these lands if the buyers can't afford to service the loans?

Kate P wrote:

That's pretty radical, expat girl. Would you suggest that trading in all Irish bank shares should have been suspended when the nationalisation of Anglo Irish was announced?

No, I'm suggesting that we have a worldwide, or at least EU/US forensic examination of bank books

The rot in the 30s was stopped when Roosevelt went in and insisted on a forensic exam of US banks, and publicised the results, I think. At the moment, we have an international problem, and various countries/banks competing for the high moral ground, where the facts actually are that we know only what the banks are choosing to publicise. Because we suspect cans of worms everywhere, the markets are in freefall and banks are posting record losses and/or share price falls. Knock on effects for pension funds, investors, interbank loans and God knows what else

24/7 news coverage requires some sort of confessional "open book" exercise to quell at least some of the fear and let people know where they and their shareholdings stand. Not just in Ireland. Otherwise we risk losing good banks as well as bad, and everyone suffers

Either that or there has to be a wave of nationalisations...or even ECB/BoE/Fed co-ordinated purchasings of debt. Something to pour water, rather than petrol, on the flames, at an international level. People everywhere are panicking right now and the risk is that if the market is let do its thing, everything will hit a wall

I don't think the state should engage in property speculation. If the state flogs the lands to pay off the loans then chances are it will end up owned by Irish people who might farm, tend or develop it. That is better than the land being tied up in foreign ownership, controlled by people who are not interested in the land.

expat girl wrote:

Kate P wrote:

That's pretty radical, expat girl. Would you suggest that trading in all Irish bank shares should have been suspended when the nationalisation of Anglo Irish was announced?

No, I'm suggesting that we have a worldwide, or at least EU/US forensic examination of bank books

The rot in the 30s was stopped when Roosevelt went in and insisted on a forensic exam of US banks, and publicised the results, I think. At the moment, we have an international problem, and various countries/banks competing for the high moral ground, where the facts actually are that we know only what the banks are choosing to publicise. Because we suspect cans of worms everywhere, the markets are in freefall and banks are posting record losses and/or share price falls. Knock on effects for pension funds, investors, interbank loans and God knows what else

24/7 news coverage requires some sort of confessional "open book" exercise to quell at least some of the fear and let people know where they and their shareholdings stand. Not just in Ireland. Otherwise we risk losing good banks as well as bad, and everyone suffers

Either that or there has to be a wave of nationalisations...or even ECB/BoE/Fed co-ordinated purchasings of debt. Something to pour water, rather than petrol, on the flames, at an international level. People everywhere are panicking right now and the risk is that if the market is let do its thing, everything will hit a wall

The idea seems to be to get the banks to carry out this analysis through the carrot and stick approach of debt insurance or a bad bank taking over the loan. Debt insurance won't be credible in IReland unless backed by the ECB so we have to go with a bad bank in the absence of an alternative being proposed by the EU/ECB.

I think it is worth saying that all action should be coordinated with the EU/ECB infsofar as is possible.

www.irishtimes.com:

Minister for Finance Brian Lenihan said the Government's move to nationalise Anglo Irish Bank had been taken to safeguard the economic future of the country and the continued viability of its financial institutions.

"The Government is determined to protect the taxpayer's interests by putting clear blue water between the new Anglo Irish bank and the unacceptable behaviour that has gone before," said Mr Lenihan.

"Anglo Irish Bank is a major financial institution, with a balance sheet in excess of €100 billion. There is no doubt that the viability of an institution of this scale is of systemic importance to Ireland. Contrary to the impression being put about, the bank lends to a wide range of customers providing funds for investment and employment in areas such as retail, office, leisure, healthcare, tourism and other services," he added.
Mr Lenihan said he had been advised that letting the bank fall would lead to "a very serious disruption of our financial system".

"The Central Bank, the Financial Regulator, the NTMA and our legal and financial advisers were unanimous in their advice to Government that strong and clear decisive action in the form of the nationalisation of Anglo was needed to maintain its commercial viability and that a failure to support the bank in this way would damage our financial system generally," he said.

"It is not a question a saving a few developers from going to the wall, it is a matter of underpinning deposit and wholesale funding throughout the financial system...the Government's actions have been made on the basis that the health of the economy is inextricably linked to the banking sector and vice versa," Mr Lenihan added.

"The decision to nationalise is a clear indication that the Irish Government is fully prepared to stand behind the Irish banking system and to demand and ensure proper governance. Our actions send one clear message to customers, investors, credit rating agencies and the markets generally that Ireland is a safe, secure place to do banking business," he concluded.

This is all I can find on the Bill on the Oireachtas website - does anyone know if the text of the draft is available anywhere

http://www.oireachtas.ie/viewdoc.asp?DocID=10803&&CatID=59

I don't trust this government one inch - don't believe that it will actually nationalise - we need to see exactly what is involved and exactly how they intend to control the behaviour of the banks. The provisions of the bailout were very loose. The public has a right to know these things FFS! We are paying for it. Commercial confidentiality be damned.