Will nationalisation ever be reversible and How?

Okay so we the tax payer are going to own the majority of the financial institutions in this country, so I got to thinking what will happen down the line with all of these and how it will be done. perhaps the more knowledgeable of you could make me a bit wiser.

How long are the government likely to hold on to their stakes?
How will this be perceived by international markets?
I know they are controlled by boards but shareholders have ultimate power and thus will the government be in a position to price fix?
Where will competition come from? PTSB and BOI (minority stake only in BOI) versus everyone else?

Also does anyone know how this bailout is perceived in europe and where is the money the government need coming from to finance it all? German banks again?

Its not nationalisation unless the state takes complete ownership.

Yes.

At a whopping great loss to the taxpayer.

And the justification? “The state is not in the business of running banks”. Ideology got us into this mess, it can surely get us into a bigger one.

Kill the body and the head will die.

effective nationalisation then. :wink:

Sorry. Tis either one or t’other.

You cant be half pregnant.

What they could have done was nationalise the fuckers ages ago (except Anglo) and gone the Swedish route.

That would have been better than this farce in all likelihood.

could someone respond to the original questions re how and when a likely reversal/sale of stake is likely to occur

How - A very long time…

When - Undefined…

It is all dependent on the banks becoming desirable in the international marketplace, quite frankly, that makes it dependent on the overall health of the Irish economy, it’s a bind… The overall economy claims to be reliant on the Banks to get the ould lending going again (to what end no one knows) and the Banks require a functioning economy to become private sector entities once more… Of course, obliquely the current hybrid suits the powers that be quite well, viz. Duke / Fitzgerald / FF / Ahearne, probably even Quinn being taken in hand by a beneficial creditor so as I said, years…

Will this mean eventual full nationalisation?

Why not go down this road now and then wind the thing down

ordinary shareholders lose all - fine - this has happened effectively
Deposits are protected
Secured creditors are protected to extent their security is worth something
Unsecured creditors lose out

Why is a bank different from any other business? Close down bad bank and surely market means another player will enter where they can make money. Liquidator comes in and sells what he can and collects what he can and winds the bank down in orderly fashion

Is this too simplistic?

The ECB don’t want us to nationalise the banks. And I dont either.

Fianna Failure determining who gets to keep their toys?

Yup.

Plus how could we keep the bond wheeze going otherwise…

The idea is for the govt to hold shares in the banks until the banks have recovered to the point where they can fund themselves from the wholesale markets. At this point the govt would float the banks on the stock exchange or sell them to another bank.

wild guess: 5 years

Markets happy to see state backing up bank debt obligations but unhappy to see state having extra national debt.

Risk is that govt will be under pressure to run the bank in an unsustainably non-commercial way to please the voters in the short term eg low mortgage rates, loan approval for nonviable business etc.

If they don’t like it they haven’t told us to stop. It also appears that the ECB have agreed to lend to our banks based on the collateral of NAMA bonds. The money is coming from borrowing and from money saved in the national pension reserve fund in the past decade.

But nationalizing the banks would be a good thing. Because once they are nationalized they automatically go on a conveyor belt (due to EU law) that ends up with them all be privatized in due course and ending up in foreign ownership.

If you want the break the current elites this is the best way of doing it. Cut off their money supply of the last 50 years and just watch the rotten corpse die.

That is why FF have done everything they could over the last 18 months to avoid nationalization. The story starts and ends with TACA.