Government needs to stop f**king around with the banks

Harney resigns and it’s bye-bye Government and we’re thrown out into the open seas.

Huddling together in the shivering cold and darkness is infinitely better than being exposed to the elements with only 30 minutes to live in your survival suit.

Fianna Fáil are a reactionary government; we won’t see action until the banks pop.

I agree with the need to act. Though i have some major reservations. The biggest of these is that there has been no recognition of irresponsible lending. Why inject capital only to facilitate further bad lending on a single overvalued asset class? I don’t see any positive if the gov and regulator maintain their current stance. For example, look at the lending criteria for home choice loans.

Ideally any recapitalisation should divert credit to productive uses. However it is also important to recognise that such sectors will have higher losses during a recession. One possibility is to manipulate capital requirements to favour business or to create a new icc bank.

Personally, I would like to see the money that would be used to recapitalise the existing banks, instead used to form a new bank with a remit to lend exclusively to Irish SME business. This would ensure the money was put to the specific use we desperately need. Let the existing banks sort out (or not) their own shit with property, credit cards, loans for fancy cars etc. I don’t want to see that stuff propped up with serious taxpayer money. Maybe that’s a radical solution, with serious detail to be worked out, but it’s the only one I can see doing us any good for the money we would put up. Only problem is that guarantee…

The banks have to be recapitalized the longer it is delayed the harder it is going to be.
I think it has to happen this week and probably will.

What is starting to worry me now is, what will the government do after it takes over one of the banks?
When you see the cronyism and corruption of the HomeLoan Choice scheme, makes me wonder how a government owned and run bank will try and help their developer friends?

Recapitalisation is a stupid idea. You could sink €100bn into these lemons and they’d still need more.

The existing Irish banks are Dead. Just give them a decent burial already. The last thing we need is 20 years of propping up zombie undead banks. Let them fail, let the State buy up a branch network and the clearing technology for a pittance, create a State-run bank with a remit to focus on providing credit to the indigenous SME/start-up sector. That can get the wheels of industry turning again, and in 3-5 years we’ll be through this mess and out the other side. Let the liquidators waste their lives trying to extract some value from the corpses, at no expense to the taxpayer.

It’ll be far quicker and far cheaper than arseing around for a generation trying to staunch the wounds on the Irish banks. It’s like waving a cotton bud at a man who has just had his arm cut off.

Or, as I said in another thread, push the liquidator of the first one to go tits up into selling to a foreign bank with a track record of lending to business.

I suppose a foreign bank would be less likely to be corrupted by the bandits of Zanu-CIF, and less likely to get bogged down in EU Competition Law nonsense.

In either case, what’s to stop the new Irish (whether State or Foreign-owned) bank being gradually morphed though through the sheer numbers of bubblehead staff, who can’t think outside the property box?

What a bloody mess. :smiling_imp: Recapitalising banks, providing state guarantees, bailing out ‘too big to fails’ is like dealing with kidnappers or hijackers. Once you give in to one demand they’ll keep coming back for more and more and more.

Soon every crackpot in the place is cutting out words from the newspapers, or lobbying for their ‘entitlement’ to taxpayers funds in their hour of need.

What we’ve needed in the last two months is real world leadership with guts that gets out there stands up and says no taxpayers bailouts. Not today, not tommorow, not ever.

The likes of BOI will be driven into a wall until the bailout they know is coming arrives.

What volume created the BOI ‘less than 1 euro’ story this morning? A million shares? :nin

Anyone wanna guess the worst case scenario for a bank bail out
and the worst case scenario for letting them go under

and also the best case scenario for the bank bail out
and the best case scenario for letting them go under

Yup, the bailout is always the worst option with pretty much no upside; and 20+ years of Japanese stagnation propping up zombies if we’re very lucky. In the worst case it leads to sovereign default and the winding up of the State.

Letting them go to the wall means we could be out of the worst of this within 5 years with some valuable and instructive, if painful, lessons learned. There’s no real downside beyond a bit of inconvenience in moving accounts from the dead ducks to the new entity; the destruction of shareholder equity; and the wipeout of the value of the nations pension funds…and the latter two are going to happen anyway.

As long as the taxpayer own the banks, I don’t see any problem with a re-capitalisation strategy.

The banking licences can be re-issued in 5 or 10 years’ time when the price is right.

A half-arsed FF attempt would be seen as nothing more than re-arranging the deck chairs.

Therefore, radical action is necessary.

If the right decisions are taken, the people will stand behind the government. If the wrong action is taken, people will be setting fires alight outside Leinster House.

Another piece of terminology to add to the lexicon.

I’m worried what FF will do once it takes control of one or more of the banks.
Can’t see any of their builder buddies being forced to reduce house prices.

And there was me thinking it was the other way around!

:laughing:

Apart from the price tag, which is going to be €30billion minimum, and could possibly end up 5 times that.

The government will be left with that bill regardless of whether it recapitalizes the banks or not.

I’m just not sure that I know which is better for the economy. I can only imagine the damage the government could do to the economy with control of a bank.

The economy is being allowed go down the tubes and the Government is standing by and watching without lifting a finger. Whats the agenda? What dirty little secrets exist within the vaults of these august institutions? The longer this is allowed go on the more convinced I am that something somewhere is rotten.

Surely incompetence alone cannot be the reason for the inaction? Or am I hopelessly naive? Is the simple answer that we are being governed by twits?

This is the longest train wreck I’ve ever witnessed.

Anyone think an institution or two will be gone by the end of the week?