I keep hearing that banks were about to go under but so far there has been no mention of who?
and as far as i know there was no special ‘liquidity’ injection so what did the government backing solve?
if there was going to be a run on a bank then why did it not play itself out to at least a certain %, i doubt everybody who was going to withdraw heard the news and decided en masse to leave their money alone.
if a bank fails does every other bank fail? and if so then why isn’t the end of lehman, indymac, washington mutual etc. causing everything to tailspin instantly?
anybody think we are not being told the whole story? or that this ‘backing/bailout’ wasn’t needed as the ONLY way to get through this economy?
There have indeed been plenty of mentions and speculations, and two names keep cropping up. Another two crop on on occasion.
Problem is systemic risk, that runs on weaker banks also trigger runs on (relatively) stronger ones. This is much more likely in a small country with a small number of players (just six Irish owned retail credit institutions)
we might find out which irish banks were insolvent first if the ecb ends up doing the job if the irish government fails. i believe the finance bill is essential at this time but bad governance brought us to this point. it will be a farce if it fails, the ecb will sooner put this country into strict monetary supervision to stay in the eurozone and if that fails we’re out.
we could then form a monetary union with zimbabwe. wheelbarrows at the ready!
so aib and boi went and told the govt that anglo and nationwide were about to go bang?
erm… why didn’t anglo do this themselves? surely that is a breach of a CEO’s responsibility to shareholders? and if true then why is he not removed by the regulator?
i think the real issue is that banks would rather get bailed out than face the reality of their past decisions play out. if i made the same mistakes i’d go broke with no help. I also don’t accept that there would be ‘mass runs’ because Lehman collapsed and every other bank is not having ‘runs’ on it?
why not let a bank reap what it sowed and then the shareholders and risk takers accept the outcome of their risk, the profitable portions of the business get sold off and competitions prevails?
No, AIB and BoI went and said that they themselves were about to collapse. That is the implication of half-Brain’s statement. Sean Fitzpatrick said on Marian Finucane yesterday that Anglo weren’t involved. This implies that the Hypo (maybe) withdrawal of 1.4 bn was from one of the big two and would have pushed them over the edge. If this is the case (and it’s a big if in a situation vested with ifs) then the collapse of the rescue for Hypo should have the central bank meeting again tonight.
Interesting. Wasn’t there an article in the Financial Times linked on the pin that hints at BoI. I still say that no matter what the consequences only depositors should be guaranteed. If that meant the collapse of all six Irish banks then so be it. Plenty of opportunity for foreign competition and we’d still have An Post, Credit Unions and so on.