Anglo pair doorstepped Gray knowing he had Cowen’s ear - Simon Carswell -> irishtimes.com/newspaper/ire … 89643.html
in banking liquidity = solvency.
the rest is just bullshit
Board of Financial Regulator pocketed €865k in fees - Nick Webb -> independent.ie/irish-news/co … 41445.html
Because nothing qualifies you to regulate a financial institution than writing novels such as Children of Eve. You would be forgiven for thinking its opening paragraph is about her time with the Regulator:
No, that’s bullshit.
The person professionally able to judge a balance sheet is a professional accountant.
What makes a professional is their ability to make judgements. That is what makes them different to say an accounting technician. This is true whether we’re talking about accountants, managers, engineers, physicians etc.
A component of a professional accountants education continually emphasised (same as any other profession), and emphasised in their membership of their professional body, are professional ethics.
Ethical behavior for a professional in the course of his duties invariably includes concern for the well-being of the society he works in, for the well-being of others, respect for others, trustworthiness and honesty, fairness, doing good, and preventing harm to others. In addition, these principles get expanded to include concepts such as objectivity, full disclosure, confidentiality, due diligence, and avoiding conflicts of interest etc.
Now, anyone can read a cash-flow statement and see that there is a need for cash one way or the other asap and so on.
But reading a balance sheet is an entirely different matter. It requires judgement.
Therein lies perhaps the most important distinction between these two issues we are discussing, currently using the terms, ‘liquidity’ and ‘solvency’.
There was a liquidity issue because they were insolvent, nobody would lend them money because the game was up.
Well that’s quite (an unhelpful) simplification.
Many funding markets were quite happy to lend on the basis of those balance sheets on a (very) short-term basis prior to certain problems developing.
Those problems developed from US based sub-prime mortgages being defaulted on, and no one knew which derivative and other products were tied up with these sub-prime mortgage contracts, as they were extremely complexly and opaquely packaged.
But the reason we have spent so much time on here trying to delineate between the issues of ‘solvency’ and ‘liquidity’, is not because of the above.
It is because following the chasms that opened up in the cash flow projections of our banks as a result of the above, Irish politicians, and Irish establishment and institutional figures stepped forward and advocated the taking of certain actions with potential long term social repercussions, outside of the market system.
They based their advocacy on the representation that “these were temporary liquidity issues” and any monies advanced or pledged by the state, would not be at risk, and would quickly be paid back, as “it was only a liquidity issue”.
This was what was represented to the Dail, and the entire Dail went along with it.
It is inescapable that the ethical probity of highly responsible actors was misappropriated and subverted, and ensuing judgement exercised was improper.
Except such a conclusion has seemed to escape Ireland Inc. and practically everyone living there.
I was able to tell a sitting government minister went canvassing for the May 2007 election that all the banks were insolvent, was I correct?
I think you are mixing up banking and accountancy, in banking the idea is to get your money back, accountancy is just counting, probably by 2005 the banks were not getting the money back.
With all due respect, that sets up even more demoralising debate on topics that are not at the heart of the issue, but are about correcting such overt simplifications.
You say, the purpose of banking is “about getting your money back”.
Yes, we could indeed go through a discussion about the purposes of banking - e.g. from the shareholders perspective, it is about making profits (and of course, the profile of shareholders is changing towards entities who hold short-term perspectives more and more), or from the point of view of indigenous business enterprise, it is to lend money into the economy to help their businesses to grow… From other perspectives, its purpose is said to be about the long term growth and balance of an economy, etc.
(On this, we might recall Ricardo’s sage words: “No wealth can be created by banking operations. Rather, they are primarily an important device to bring about a better arrangement of productive forces.”)
With regards your assertion that accountancy is “just counting”, well as a precursor to discussion to its purpose, we might look first toward financial accounting which is driven by the effort to produce good information for external entities like investors, regulatory bodies, the general public, towards proper investment decisions and stewardship etc.
And then we have management accounting, which is purposed towards internal decision-making, and to satisfy costing, controlling, internal decision making objectives etc.
As I point out in my post above, I think it is absolutely critical to include in any discussion of the purposes of accounting, the role of ethics and other aspects of professionalism.
I don’t think these one-liner throw-away simplifications are helpful. In fact they strike me very much as Orwellian type devices crucial in facilitating the shit that goes on around us. They are ultimately confusing, notwithstanding that they are memorable and catching.
I would say from 2005, ethics were being misappropriated and subverted by certain business interests. Ultimately, the numbers added up. But there was a reality lying under those numbers that ought to have been challenged, and it would have been challenged if it was not for this ethical based problem.
Following from that I think it is crucial to acknowledge that it was the unregenerate upholding and extolling of these self-same ethics that lead to the decisions and action taken in the political and social sphere 2008-2012. That is the fact that helps us better understand the nature of the “cover-up” in that period.