Zombie bank or €20bn + to shut down you choose?maybe 60bn

George Lee wants to wind up Anglo

Alan Dukes the gov director on the board says we can’t afford to.

Impaired loans have jumped to 20bn

according to Dukes the state can’t afford to shut t down
which is the least worst option in people opinion?

Keep it a zombie bank for 20 years or take the 20bn (if we’re lucky ) hit up front !!!

I can’t seem to add a poll?

Yeah, Mr. Dukes was on Morning Ireland and to my mind he made reference to the Anglo derivative book in his talk of many billions. Anyone else get that feeling?

Reposting my post from the “Stickiness” thread

Could someone explain this to me. The way I see it, if Anglo has a hole of €20Bn now (and that number has not been confirmed, but let’s take it as that for now) , it will have a hole of €20Bn later as well.
Unless one is trying to argue that it will achieve more for its assets later on (which I doubt), or that it will start making money on lending and pay back the €20Bn.

The only reason I can see why one wouldn’t want to shut down Anglo now is that the government don’t want to pay the €20Bn right now. Instead, it is happier to pay it out in dribs and drabs over the next 10 years or so (when there will be less public outrage, and [they hope] more easily accessible credit to pay for it).

Is my understanding wrong?

superman, if the problem is derivatives, then it costs money up front to unwind these if they are currently losing positions. So it looks like the hope is that it will be possible to trade the derivative book to lower losses/profit. As jmc and baby_tooth pointed out some time ago, this is a very dangerous thing to do.

It may also be the case that Anglo ceasing to be a going concern would trigger some of the derivatives for immediate settlement? Anyone expert care to comment?

why not just shut it down.
just garuntee the deposits - so what if impaired loans are 20bn.
this just means that anglo have loaned out money that they wont see again. where did they get this money to loan out?

Can the guarantee not be revoked because of the “loan” from IL&P that boosted the books?

Also if it emerges (as Shane Ross asks) that the jump from 2Bn to 23Bn impaired loans is due to a cover-up by people within the bank- is there any “uberrimae fideis” aspect to the guarantee?

If a business or anyone got such a guarantee, surely in the case of “alleged” fraud and inappropriate behaviour this would nullify it? Or at least give an opening for a review?

the way I understand it

so if a financial adviser comes to you and advises you pay off your 100k CC debt immediately

but you don’t even have €00.80 then he can advise all he wants but you ain’t gonna do it.

now he may recommend that you approach the bank and look to settle…

but if that means that your overdraft is shut down and you get evicted from your house you are likely to just keep going as you are and hope the fateful day never comes.

winding up anglo will cost 20bn immediately
we don’t have 20bn and can’t borrow it
so therefore we can’t wind up anglo

so instead we’ll just hide the 20bn in this zombie bank and just hope that we can service the debt … or that property goes back up…or the derivatives turn
and that the ECB help us get away with it…

if we had let it fold we wouldn’t be in this mess

we might be in a different mess

but not this mess
and this mess is shite and a direct result of the cosie cartel between FF and their property mates and private bank…


Not necessarily, with recovery in property values, the deficit decreases (hopefully).

It’s not a matter of wanting or not wanting to pay 20bn. The government does not have 20bn.

€60 billion Anglo sized hole according to Clowan.


Isn’t the accounting profession wonderful that they could show “assets” of over €100 billion when the actual value is around €40 billion…

Anglo’s 2008 Annual Report (signed off by Ersnt & Young in Feb 2009) must rank as one of the greatest ever examples of Irish fiction writing. “Breathtaking” sez Tom Clancy “Incredible” Dan Brown “Unbelievable” Daily Star “€3.7b shareholders equity - astonishing” Jar Jar Binks


Is 'e 'aving a larf?

I head €64 Billion - irishtimes.com/newspaper/breaking/2009/0610/breaking33.htm

I thought O’Connor/Dukes mentioned €50 Billion yesterday,

Either way, the thread title should be amended to reflect the real cost of shuttin this sucka down.

Yoganmahew - O’Connor said they were taking other measures to reduce their capital requirements but he could not be specific due to price sensitivity. Dukes backed him up when Burton kept asking the questions he said he could not answer. Is this your derivatives book, do you think?

It could be, they may be attempting to buy back some of the losing bets and unwind them. If this got know in the market, it would probably increase the price. But the market is not stupid. Or at least, not that stupid. It knew that Anglo was a dead duck long before the powers that be copped on. It can figure out what options are open to Anglo…

There are some other possibilities too:

  • debt buyback
  • more securitisations at the ECB
  • the great government bond repo-pyramid
  • sales of assets

Probably all of these are going on…