Government to guarantee bank deposits/debt


#1

BN 6:47 *IRISH BANK GUARANTEE BEGAN FROM MIDNIGHT SEPT. 29 BN 6:47 *IRISH BANK GUARANTEE WILL COVER EXISTING, NEW FACILITIES BN 6:46 *IRELAND WANTS TO `REMOVE UNCERTAINTY' AMONG COUNTERPARTIES BN 6:46 *IRELAND SAYS GUARANTEE WILL OPERATE FOR 2 YRS BN 6:46 *IRISH FINANCE MINISTRY ISSUED E-MAILED STATEMENT TODAY BN 6:46 *IRISH GOVERNMENT TO GUARANTEE BANKS' SENIOR DEBT, BONDS BN 6:46 *IRISH GOVERNMENT TO GUARANTEE ALL BANK DEPOSITS

Mod edit: thread title


#2

Wow. Just like McWilliams called for. Except I think he wanted all bonds guaranteed.


#3

Am I getting anything for investing in the banks?


#4

What does this mean?


#5

Going off reports on the news reports on the radio this morning everything is covered (including bonds) in all the main banks

rte.ie/news/2008/0930/economy.html


#6

Take a bow David McWilliams, please God it hasn’t come too late.


#7

Watch for other CBs to follow, great move


#8

So what happens now if a bank fails? The government gets hit for a few hundred billion?


#9

This is a necessary step and should have been done weeks ago.

The entire banking system will fail if people have any doubts about the safety of their deposits.


#10

In some cases several billions


#11

As usual the government are reactive instead of proactive - I hope this isn’t too late. I can sense some panic in the news reports which will surely project to the masses - I can see a lot of money being moved today.

Even the way the news reports on the radio this morning “announced” the new measures had a feeling of national crisis announcement about it…


#12

Are the Irish banks going to soar this morning? Will this reduce all their funding concerns?


#13

McWilliams’ article seemed to suggest E500Bn in total across the banks.


#14

They should have gone the full way and guaranteed the shares prices too.


#15

It means two things …

  1. that the government has promised State money to proetect every/any bank in the country. Potentially they have promised a blank cheque against your tax euros, State pension, others Social welfare …

  2. depending on just how far the government will go to ‘defend’ any bank they may have just painted a great big bullseye on every bank here for speculators, as the government has thrown it’s weight into the ring behind the banks. Think the UK fighting to stay in the ERM. Expect the markets to test this.

Interesting times.

Blue Horseshoe


#16

Johnboy wrote:

Er, why?

This is another great move by the gov. The second in their tenure in gov. The first was guaranting the first €100k of deposits. And now this

So bad luck to the doom-mongers and ppl who post statements like “Don’t worry - the crash is still on!” :unamused: : ppls feelings on share prices are immaterial: their feelings on deposits are not. And after the Right Hook program, at least €50 MILLION is out there on deposit.

That would have added up to some bank run…


#17

summary: the issue here is that available credit is drying up. About 45000 people lost their job in this country in the last 9 months. The atmosphere for doing business in this country is getting difficult.

The issue with the financials is that they feed into the rest of the economy. That’s why banks are getting nationalised and bailed out when car manufacturers and airlines have to make it on their own.


#18

Guaranteeing all bonds as well? Looks like we’re screwed when one of the banks fail. They couldn’t possibly fund that much?


#19

Just reading more on this and giving it a little more thought …

The State has basically guaranteed all bank borrowings/debt. So basically, it’s a get out of jail free card for the banks to borrow what they like, even if its deliquent!

Secondly, as it’s now all potetially State debt, it’ll no longer be the markets just evaluating the credit worthyness of the indivual banks, but rather the creditworthyness of Ireland

Blue Horseshoe


#20

No they couldn’t. Therefore to means the banks must be in fairly OK shape for the gov to offer such a scheme.