At the time, I said that Irish deposit holders have benefited from banks in which they were invested in from being shut down and put into liquidation. But for government intervention (bank guarantee), deposit holders would have had their funds frozen and they would have eventually recieved cents in the Euro when the wind-down was complete (as per Icesave, Presbyterian Mutual, and that Danish bank that went belly up). Instead, the liabilities of Irish deposit holders have been transferred onto the balance sheet of the Irish State. If the banks are controlled by the State, then it only stands to reason that the banks can only be as safe as the State. If an Ireland 10 year government bond is 10% - a deposit in an Irish bank is at very best, as safe as that; at worse, a heck of a lot more at risk. Now that we have taken on all the banking losses, and commited to our “European partners” that we will pay up all the losses - some one is going to have to actually pay up. Will we hit deposit holders, even though we have commited to protecting them? Will we hit those who have a means to pay - all those fat cats with private pensions will certainly be an easy target, afterall, those guys were able to save their cash in the good times, they can contribute to the pain. Maybe we should just go for the big bang - hit everyone and anyone who contributes taxes through income, fuel, or VAT?
We have done the easy part - we have guaranteed that the masses will not lose. At this stage, we’re well into the tricky part of who should pay. The crosshairs are falling onto who can pay; likely, the Pinster demographic of people who generally save, who have jobs and actually have capital (pensions, savings, etc.). Time to pay up folks.
Ah, the refractory sister/brother conundrum … I have a brother like this who wilfully will not see that there might be a problem with having all your money in one bank in Ireland. There’s not much you can do with this kind of refusal to face reality, other than urge them to read the article in the NY Times article mentioned above and/or to have a look that the “EUR Wedge on the Edge” thread on here. I spoke to a my more rational sibling about 2 years ago about this and she moved her money out Irish zombies then, TG - she has a daughter to think about.