Northern Rock. This happened the year before Lehmans. The weaknesses of the NR funding model could be found in Irish banks. The problems for Irish banks were well advanced by the time Lehmans happened. Why does John Hurley still have a job?
Initially I didn’t, but decided to edit out the colour.
I’m fed up with the scapegoating of Lehmans. Yes, it accelerated the demise but the outcome would have been the same (the Irish credit/property bubble had already burst and it was only a matter of time before international investors fled). The real red flag event was Northern Rock as Irish banks relied on interbank loans and securitisation for funds.
It’s important not to airbrush Northern Rock from the picture. Especially when FF post-NAMA (plus extended guarantee) are looking to restart the Northern Rock model.
Never mind post-NAMA, the state has turned into Northern Rock. We are borrowing huge amounts of money in commercial paper and treasury bills (short) and using them to recapitalise the banks, build infrastructure, pay salaries hoping for an upturn to pay them back (long).
It’s time to get these leeches back onm the salaries they deserve in respect of their importance and competences. This is a head of a Central Bank without jurisdiction over the monetary policy and who failed miserably on the whatever precious few responsibilities he has left. He should be on around 70k maximum. What does a Central Bank without money do in the first place??