In response to a question in The Herald on 21st July 2008 on the safety of bank deposits, Dan White made this prediction …
Oh dear …
Blue Horseshoe
It’s not really that surprising. The govt. could not possibly let either bank go under. They would probably be nationalised in a worst case scenario.
ECB might have something to say about that.
I don’t think there is anything particularly controversial there. ALthough I would probably characterise things a little differently.
They may well let them fail (i.e. go into isolvency), but they will protect depositers.
Yes. Equity holders will be sacrificed if necessary a la Bear Stearns but depositors will be protected. I wouldn’t rule out some property-friendly actions dressed up as a some kind of stimulus package
…up to 20kish
IMHO, if any of the Irish banks fail, then they should be let die.
If they fail, it will have been because of bad decisions by the banks management, who, no doubt are the very people currently busy lobbying the government to protect them in the difficult conditions that currently exist.
They will no doubt be plying the lie that the banks are too big, too important to the economy to be allowed to fail.
This of course, anyone with an understanding at Junior Cert level economics will know to be complete rubbish. Yes, a health banking SECTOR is required in order for a healthy economy. Individual banks can come and go, so long as the sector is functioning well. In fact, allowing failed, failing or just badly run institutions to die is a positive thing for the banking sector, it’s almost Darwinian. The old and weak, or those that do not/can not adapt to a changed environment (or are just plain baldy run) become extinct leaving the healthy and well run, well funded institutions to carry on. A purge of the system quickly remedies the systemic problems. Any void left by the failed institutions will be filled by new ones.
Any government bail out using the cash resources of the citizens of the State (i.e. OUR MONEY) punishes those who have been financially prudent in the bubble years and double whammy punished those who have not.
If the government bails out any Irish financial institution then they will have shown themselves to be completely economically inept and demonstrate they have the independence of Bosco (the only questions will be which VI’s have their hands up which politico’s behind).
Blue Horseshoe
Aww man Darwin was so wrong I am fed up with as an analogy to justify stuff, it was only ever a thoery nothing more. However the overall point stands and I would say many are in agreement.
Let the Bank fall as Gekko pointed out but protect the depositors and everyones happy en dat right Mr.Gekko 
Darwin so wrong… 
150 years later we have more evidence than ever that he was so right.
I hesitate to say this, because I guess it would come out of my taxes, but practically the way might be to revise the deposit protection scheme to a higher level say 40k per account name, like Rabo. Else funds are just going to flow to more secure locations eg Postbank, Rabo and offshore(???)
If banks are becoming reliant on depositors then I wonder if failure to so act in good time could result in a bank going under?
More questions than answers in this post, sorry. 
I see First Active have just introduced a new fee for topping up a mortgage or for switching from a tracker or variable to a fixed rate, the fee is €125 folks and now we start to pay for the banks mistakes. 
Apologies if this is in the wrong thread.
The fact that it is even being discussed in the Herald what might happen if a bank fails is evidence to me of how things have turned around in 12 months.
Because it sells newspapers. The majority of people have a bank a/c (except one former Taoiseach 
) so any talk of a bank failue is good for newspaper sales.
In reality, there’s no chance of an Irish bank going under because (A) they are very well capitalized, and (B) the government would not allow it to happen (a la Northern Rock).
You’re really missing the point, aren’t you? This is the speculation.
Other things sell newspapers. PIctures of Brangelina’s twins will sell more copies of the Evening Herald than Dan White reiterating what most people deep down believe the government will do if a major bank discovers that in fact, it is not sufficiently well capitalised.
Obviously I am. But it’s more than speculation. There’s just no way on this planet the gov is going to allow a bank to fail. Not going to happen. No way. Not a chance. Never. No-no.
No bank is even close to that stage anyway.
I fully understand that any positive news on the PIN is shunned and dismissed so I’ll leave it at that! Do your worst! I already hear the distant drum of meaningless statistics and quotes approaching…
edit/ I could see shareholders getting wiped out, but not depositors.
This is not news, it is your opinion and speculation. Nothing else, and calling it “good news” is overcooking it. Speculation is all it is.
Learn the difference between speculation and news. One is fact, one is opinion. You can speculate all you like - I don’t care - but recognise that it is speculation and not fact. You believing it doesn’t make it fact until it happens.
If, on the other hand, all the banks are sufficiently capitalised, then it doesn’t matter what the government does, so tell me, if they are sufficiently capitalised, why have their share prices all collapsed, and why are people saying “well the government will step in?”
Might it be because…in fact…the risk is there?
This is positive news? That we taxpayers are going to be on the hook for any Irish banks’ bad debts?
I agree that no bank is close, but Indymac bank in the US was not on the FDIC watchlist when it closed its doors. Confidence can evaporate quite quickly.
There are four quoted banks:
BoI
AIB
Anglo
PTSB
There are two mutuals (I think?):
INBS
EBS
Everyone else is owned by someone and conditions in the owner’s home market will determine what happens to them. Effectively they are not Irish (think Ulster Bank, NIB etc.).
Worst case scenarios is government sponsored takeovers by the strong of the weak. Leaving only the weak IMO. The weakest? The mutuals I guess, but that is based on the lack of transparency of their balance sheet and the weak management (as evidenced by the INBS sale fiasco).
What is more interesting is whether the credit unions will be impacted and what sort of bailout will be organised for them if required.
I worked for UB from the mid nineties to very early noughties. Although part of the Natwest Group at the time, we were very much left to our own devices as an all Ireland bank.
I left as the influence of the RBS cutbacks was taking hold. I’m not sure how close the ties with Edinburgh are now.