Recapitalisations

How much has been spent in total so far on all of our recapitalisations?

Bank of Ireland €3.5 billion
AIB €3.5 billion
Anglo Irish Bank €3.8 billion

And how much of those banks do we own as a result? (Obviously 100% of Anglo).

Anglo 100%

AIB 0%. The state holds 25% of the voting shares as a result of a €3.5billion “investment” in preference shares but 0% of ordinary shares. There is method in which state can convert it’s preference shares to ordinary shares.

Bank of Irlenad - the Irish state holds 15% of the ordinary shares. Similar to AIB above, there is a method for it to convert it’s €3.5 billion preference shares to ordinary shares increasing it’s ownership.

Banking big bang: what will it cost? - Cliff Taylor → sbpost.ie/newsfeatures/banki … 47810.html

From Cliff Taylor’s piece:

Governor Honohan did indeed say this, but he is being a little coy. The need to ram through 8% quickly is down to the fact that Basel III will lead to a dramatic tightening of capital rules with many things that are now considered capital no longer eligible (deferred tax assets, pension deficits, minority share interests seem almost certain to go, others are likely - positive derivative balances, for example). So the rush is on to get the banks to a state where they can build capital reserves from profits instead of having to feed it into taking losses.

So for 10.8bn we have managed to acquire 100% of a worthless bank, 0% of a bank worth 1.275bn, and 15% of a bank worth 1.217bn(BoI), in and in addition we have mortgaged the nation for possibly 100 years, for a non functioning banking system. We surely have some great genius in the department of Finance, don’t we?

We need to ban, or modify, the use of property in this country as security for loans, fianlly forcing the banks to bank, i.e.: To make professional judgements as to what is a solid business case. I would suggest the US non recourse mortgage as a starter.

The €7b we have so far given to BoI and AIB - is that a de facto “loan”? Considering we didn’t get much equity for that whopping amount, is it still chalked down to be (in theory) repaid at some point?

The total bank capitalisation will be a minimum of €40 billion. Period. Question is who is going to pay what. Germany? Bondholders? Irish taxpayers? Banks from increased charges and interest rates to Irish taxpayers?

BTW, none of this includes the loss in value of Anglo’s UK and USA loan books. Circa €20 billion in total, they are now worth half of that at most. In fact they can only get offers of between 20% to 30% for them. That’s a hidden loss of up to another €12 billion waiting in the wings on Anglo alone. Link to Neil Callanan’s article:

tribune.ie/business/article/ … just-24bn/

Amazing this link business - I think that information went around in a circle through a mutual contact!

What other banks are closing here due to govt interference in the market?

So far I have
halifax.ie/ (Bank of Scotland Ireland)
irishtimes.com/newspaper/bre … ing60.html

PostBank closing 130 jobs going
rte.ie/news/2010/0227/postbank.html

A shade under a thousand jobs lost, anything to say beyond doutb these banks would be able to compete were it not for the recapitalisations…they would potentially mopped up customers had AIB or BOI failed

Anglo will probably close anyway and has let go of staff, AIB and BOI will no doubt downsize but Govt interference is crowding out competition!

In fairness BOSI wasn’t exactly a tightly run ship and PostBank was fundamentally unworkable from day 1, I don’t think you can attribute either to Govt interference in the market, especially when you consider what has been done in the UK, Holland, etc., for the banks.

fair points, Ive a feeling though that soon enough customers will have little chance to shop around for the best deal when it comes to banking

Yes because there’s been an upsurge in competition across the continent? Eh, thought not.

Ireland is not exceptional in this regard, we are exceptional in the bank that we chose to nationalise.