Does this mean that the deposit guarantees may be useless? Brendan Keenan: Indo

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monagt

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"The Government may have to call upon the art of the possible. It would lay out its stall on the fiscally possible and set a limit to bank rescue costs so that total public debt remains in the realms of what it is possible to service.
It would even have to say how losses would be shared between depositors, creditors and lenders to the Government itself, should the bank costs prove in the end to be impossible to cover"

Informed observations on this article content please!

ref:
Brendan Keenan: We need a coherent fiscal strategy before it's too late. Independent today 23rd September.
 
solvency

I think we will default, but it wont be called that. IMF in and banks bankrupt and savings gone.
 
"It would even have to say how losses would be shared between depositors, creditors and lenders to the Government itself, should the bank costs prove in the end to be impossible to cover."

Not even a word about the Bondholders I see.

Have they evaporated, or are they, as people now begin to suspect, the very same zombie banks we are supporting?

There was it seemed some logic to supporting the Irish Banks to protect depositors, bond holders and foreign creditors, insofare as failing to protect deposits, and foreign debts would destroy our economic health and international standing respectively.

This was back when we thought that the Bond Holders might have been the great and the good of Irish society and business, the High Net Worth individuals on whom the entrepreneur class might rely to finance new enterprise and initiatives.

But if it turns out that the biggest Bond Holders were the Banks themselves, how can that logic persist?

ONQ.
 
"should the bank costs prove in the end to be impossible to cover"

What COSTS?

This is a hole in the Banks capital lending ratio, a fictional figure supposedly to be maintained in case there is a run on a bank.
In practice this is maintained to prevent any real competition to large banks from smaller banks.
So there are NO REAL COSTS - just the fictional ramblings of finance directors, based on the even more fictitious nonsense that Banks operate under principles of sound financial governance.

Just utter nonsense both three years ago and thirteen years ago.
Three years ago the Banks were shovelling money at everyone with a piece of land.
Thirteen years ago you couldn't get a loan to finance speculative development.
The first pumped up the Tiger economy after the second held it back unreasonably for years.

The problem was Cowan's lack of foresight and Ministerial ability in dealing with the boom, a failure than you cna be sure had Berti Ahearne's fingerprints all over it.

  • no restraint, no regulation
  • nothing done to reduce pressure
  • the continuance of tax incentives long after they were needed
  • the failure to implement even the 40% Capital Gains Tax
  • the failure to prevent recycling of profits by developers into buying property pushing the values to unsustainable levels
That's the danger of letting intelligent people without much common sense run a government.
So much for the "real government" those overpaid, overpensioned hacks in Grade 1 and 1 Civil Servant positions.
Tell the lot of them they have lost their pensions until they find us a way out of the financial black hole we're in - because its the truth!

The investing of profits in property drove prices up astronimically, and together with the easy availability of low interest credit, is I believe what led to private home owners borrowing far more than they could sustain in an even moderate interest level - say 4-5% - with only one job.
There was a mean to be found somewhere, and it was mere hubris to ignore warnings like the value or property here exceeding the property values in places like New York, Paris and Hong Kong, major urban and financial centres.

Now we face more "financial prudence" from the Masters of the World in the Bank for International Settlements in Basle, Switzerland.
They, arguably the architects of the current disaster, now appear to be planning to repeat their "mistake" and raise bank capital lending ratio requirements again.

Someone needs to give these unelected people a good boot in the behind.

ONQ.
 
I do not believe the EU will let Ireland default. We have done everything they have asked us to do. If they let us fail it would send the wrong message to other countries in financial difficulties, i.e. it is not advantageous to sell out your citizens to save the bondholders.

But saying all that... I am in the process of opening a bank account in Belgium.
 
UFC said:
I do not believe the EU will let Ireland default. We have done everything they have asked us to do. If they let us fail it would send the wrong message to other countries in financial difficulties, i.e. it is not advantageous to sell out your citizens to save the bondholders.

But saying all that... I am in the process of opening a bank account in Belgium.
Click to expand...

Which bank pls? Can we all help each other? Tomorrow I'll call the italian banks I'm talking with asking if the italian passport is needed or if irish passport can be accepted.

Pls let's help each other. It looks like we are starting a battle against the time. :eek:
 
Bugger..i put my few pennies in a 1 year fixed with Anglo 2 months ago on the basis that it looked safe (not anglo - but the guarantees in place).
 
what about investments

what about investing the deposits in an investment fund (obviously it would need to be a good one). surely the government would not be able to confiscate investments. Still i cannot see such a doomsday scenario happening, firstly it would spread around europe , and would not be an isolated irish case, in such a scenario no country would be safe, if a huge currency like the euro came under threat it would have global ramifications, simply put it is not possible to isolate ireland out of the euro because so much of our debts are entangled in europe,
 
jpd said:
As safe as all the other debts guaranteed by the Irish State.
Click to expand...

Kinda.

I would say
1) Most risky if Ireland defaults - 100% state owned deposits - i.e. Anglo, INBS, An Post etc
2) Slightly less risky - state guaranteed but not 100% owned - i.e. BOI etc
 
Oh dear what a moment... I remember this is my 3rd wave of panic:
1st - NR Ireland
2nd - before the full guarantee of some deposits
3rd (this one) now Ireland having to pay such high interest to borrow money :(

I'm praying that this nightmare can end somehow as soon as we've discovered how much the hole in Anglo is going to cost to us :(
 
I'm intending to move deposits to non-Irish banks as well in the next month. I say that as someone who was confident of sticking with Northern Rock while others queued along streets to get their money out, and was similarly content to not withdraw from Anglo Irish Bank and Irish Nationwide as they imploded.

I'm not so confident lately though...
 
I like this article as well:
http://www.marketoracle.co.uk/Article22961.html

Expecially the honest words at the end:
However, in Ireland it would appear an end game is shaping up. There is a limit to the level of borrowing the country can run up particularly with exploding interest costs. Should the Irish political system continue to prove itself incapable of restructuring its bloated public service expenditure it is inevitable that at some stage the IMF, probably through the auspices of the European Central Bank, will wade in and directly instruct the Irish Department of Finance to act. From my point of view the sooner this happens the better because it is only then that people will realise that the bottom is in. It is then and only then that confidence will be restored to the wonderful Emerald Isle.
 
Godfather said:
I like this article as well:
http://www.marketoracle.co.uk/Article22961.html

Expecially the honest words at the end:
However, in Ireland it would appear an end game is shaping up. There is a limit to the level of borrowing the country can run up particularly with exploding interest costs. Should the Irish political system continue to prove itself incapable of restructuring its bloated public service expenditure it is inevitable that at some stage the IMF, probably through the auspices of the European Central Bank, will wade in and directly instruct the Irish Department of Finance to act. From my point of view the sooner this happens the better because it is only then that people will realise that the bottom is in. It is then and only then that confidence will be restored to the wonderful Emerald Isle.
Click to expand...

Excellently put and in wholehearted agreement.
 
Deposit safety

Hi all
What would your advice be re the following:
I've taken all our life savings and have them ready to lodge to Anglo for 1 year as it has the best rate and "guaranteed" if deposited by September 29th....
I cannot afford to lose any of this money.
Am I mad? We will be wiped out totally if any of this disappears.
Any advice appreciated please. The rates are so poor everywhere that I'm trying to get a rate that at least beats our mortgage rate.
Thanks
S
 
I don't think it would be wise to have 100% of your savings in Anglo.

Have you read the best buy threads here?
 
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