# Prime Time Investigates the banking system and regulation tonight



## Brendan Burgess (21 Dec 2009)

*Monday 21st December 9.35 pm RTE 1*
Available here via the RTE Player.



> In-depth reports on major issues affecting Irish society. Oonagh Smyth reports on events within the Irish banking system before the economy fell into crisis


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## MandaC (21 Dec 2009)

Interesting program allright.  Some of those lending practices were shocking.


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## roro123 (22 Dec 2009)

Funny that those who defraud the taxpayer get named and shamed by the Revenue, regardless of whether the tax evasion was intentional, misguided ,misadvised or purely with intent. Surely once an investigation is up and running, those who acquired loans without the proper documentation should also fall into a similar category and their information be published, detailing how much taxpayers are footing the bill for their greed.
And dont let me hear anyone say well those Fianna Fail politicians wouldnt have got the loans if the like of Irish Nationwide didnt facilitate them. First rule in politics is CYA.
BTW I'm more than suprised that this thread isn't 50 pages long already, or is everybody speechless?


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## jack2009 (22 Dec 2009)

roro123 said:


> Funny that those who defraud the taxpayer get named and shamed by the Revenue, regardless of whether the tax evasion was intentional, misguided ,misadvised or purely with intent. Surely once an investigation is up and running, those who acquired loans without the proper documentation should also fall into a similar category and their information be published, detailing how much taxpayers are footing the bill for their greed.
> And dont let me hear anyone say well those Fianna Fail politicians wouldnt have got the loans if the like of Irish Nationwide didnt facilitate them. First rule in politics is CYA.
> BTW I'm more than suprised that this thread isn't 50 pages long already, or is everybody speechless?


 
CYA!!!  its the first rule of business!


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## Brendan Burgess (22 Dec 2009)

There is simply no comparison between tax evasion and not completing the required paperwork for a bank loan.

The paperwork for money laundering is hugely inappropriate. Under the law, Charlie McCreevy would have had to provide a passport and two utility bills. Everyone in the Irish Nationwide knew him. I would have no problem with them not complying with this law. 

His ability to repay the €1.6m loan should have been assessed. I don't know if it was or not. 

I am not defending the Irish Nationwide practices - I am pointing out that it is not appropriate to compare them with tax evasion, which is a criminal offence. 

Brendan


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## Sunny (22 Dec 2009)

I have to say I found it a very intersting programme. It confirmed a few things that were always rumoured.

Couple of things I really found interesting were the loans to politicians (Morgan Kelly, I think it was made a good point that policitians should have to disclose their liabilities well as their assets).

The part played by the regulator and Central bank in the loans between IL&P and Anglo. Their were always stories that IL&P were seriously annoyed because they thought they acting with the regulators and central banks consent and that seems to be confirmed.

Also confirms that the man on street seemed to grasp the seriousness of the situation alot quicker than bankers, regulators and policitians did when the banking crisis began.


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## Complainer (22 Dec 2009)

The interesting bit for me was the information about the Regulator's attempts to take on Irish Nationwide in 2004 and get them to control their lending practices and reduce Fingelton's personal control. 

Fingleton/Walsh obviously just gave two fingers (pun intended) to the Regulator. Did the Regulator have no power to get on top of this?


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## tiger (22 Dec 2009)

I was glad to see nothing illegal actually occured


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## Brendan Burgess (22 Dec 2009)

Sunny said:


> Their were always stories that IL&P were seriously annoyed because they thought they acting with the regulators and central banks consent and that seems to be confirmed.
> 
> .



I was a bit confused by this. As I understand it...

The transaction took place. 
The Financial Regulator,at a lower level, became aware of it afterwards, but before the Anglo Irish accounts were published. 
A senior person in the FR phoned to confirm that this transaction had taken place. 

I presume she was phoning to check up on the information supplied by her junior staff? It was not a pre-approval of the transaction though.

It's odd then that the FR did not insist that it be disclosed in the accounts as an artificial transaction. However, I  understand the FR's problem - by highlighting this, they would have caused a run on Anglo.  I understand it - but I don't agree with it.

Brendan


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## roro123 (22 Dec 2009)

Brendan, the criminal justice act was delayed and delayed by politicians like Lawlor et al, I don't care if everyone in Nationwide knew who their customers were, it is paramount that the paperwork and the assessment are carried out correctly . It also breeds the perception that these characters are outside the law. How many bank accounts did Liam Lawlor have in different names and shelf companies trying to hide illegality? Not adhering to the criminal justice act is illegal, just as forgetting to settle your tax matters. This whole mess confirms that there is a conspiracy at the highest levels and that there is one rule for the rich and one rule for the poor. On the issue of liabilities being disclosed, a sitting TD must resign their seat if they are deemed bankrupt, it nearly and possibly should have happened to Cooper Flynn. There is no doubt that NAMA is hiding some very murky and undemocratic dirt.


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## Romulan (22 Dec 2009)

The comments about Central Bank inspections tallies with my recollections of a time I worked for a foreign bank.  CB inspections did not seem to generate much concern while Head Office inspections every couple of years brought 2 months of fear and loathing........the latter were career changing events.


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## Delboy (22 Dec 2009)

not surprised but very angry watching that last night

as i saw it...anglo create the rush into madness, the establishment banks come under pressure to match anglo's profits and join in, irish nationwide were going along at their own fiery pace but not enough to upset the establishment banks like anglo did

financial regulator becomes aware of some questionable transactions, central bank likewise but all seem to back off or just send letters....why?

because politicians are afraid of their lives of the whole thing collapsing and not enough revenue coming into the coffers from over extended property buyers and commercial property transaction taxes to cover the benchmarking/increased dole and pensions/their own high salaries...plus some of them are very 'friendly' with the banks and don't want to rock the boat as it might expose them in any investigation

so the central bank and financial regulator keep going with the softly softly approach, not that they seemed to have the intelligence or capacity to do otherwise in any case even if the Govt said 'get tough' with the banks.

1 thing has always puzzled me in this whole sorry episode....how come no journalist worth his salt was breaking stories on this...i.e. talking to sources in the banks or the regulator, disgruntled developers who were'nt getting the same treatment, some politician with a conscience keen to reveal what was going on so as to maybe get at Bertie, etc etc
Why not?....we all know now from last night....banks were given loans without the proper paperwork/questions being asked on demand to 'senior politicians, millionaire sportspeople and journalists'. So the banks were keeping developers, politicians and journalists happy...the circle was completed!
A lot of people on the street knew of stories where in major developments some leading and not so leading lights of provincial rugby teams were being given 1st option to buy apts/houses ...a way to publicise the development through word of mouth plus for the developers/estate agents to hang out and make friends with sporting heroes....but not everyone in rugby in ireland makes a big salary and could possibly afford to be in on those deals.....yet no journalist ever looked into these stories.
Heard some similar stories about GAA players and they earn 'nothing' from the sport...


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## Purple (22 Dec 2009)

Complainer said:


> The interesting bit for me was the information about the Regulator's attempts to take on Irish Nationwide in 2004 and get them to control their lending practices and reduce Fingelton's personal control.
> 
> Fingleton/Walsh obviously just gave two fingers (pun intended) to the Regulator. Did the Regulator have no power to get on top of this?



That's what struck me as interesting as well.


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## canicemcavoy (22 Dec 2009)

"1 thing has always puzzled me in this whole sorry episode....how come no journalist worth his salt was breaking stories on this..."

Because the newspapers were bought and paid for by the property industry? 70% of the Irish Times' income came from it, for example. A senior business editor could get the sack for as little as making a wisecrack about an estate agent being unable to sell their house - in that kind of climate, why stick your head above the parapet? Far better to be a Liz O'Kane or a Isabel Morton, write some gushing property porn, and collect your cheque.

It's not like the public would thank you. People, after all, were happy to know that their house was worth even more and more every year. People who pointed out that this could not last forever were labelled hysterical, and told by our former Taoiseach to commit suicide.

The good old days, as we call them.


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## Robin Banks (22 Dec 2009)

Brendan said:


> The paperwork for money laundering is hugely inappropriate. Under the law, Charlie McCreevy would have had to provide a passport and two utility bills. Everyone in the Irish Nationwide knew him. I would have no problem with them not complying with this law.


 
And what if it later transpired that Charlie _was_ laundering money, but the DPP was unable to launch a prosecution because proper procedures were not followed when the account was opened?

How often have the gombeen Irish "elite" escaped punishment because it's one law for them and another for the rest of us?

Give it a rest Brendan, I'm sick of that mentality and where it's lead us.


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## Brendan Burgess (22 Dec 2009)

You miss the point completely.

The purpose of the legislation is so that the person can be positively and definitely identified. If a stranger walks into AIB to open an account, they must confirm their identity by supplying esb bills and passports. 

There was no loss whatsoever to anyone by Charlie McCreevy's alleged failure to provide these. 

As far as I know, it derives from Money Laundering legislation which is often totally inappropriate in practice. 

I have been the most vociferous critic of Michael Fingleton and the Irish Nationwide over the years. Criticising them over minor technical issues, diverts attention from the much bigger issues. 

I put down a motion of no confidence in Fingleton at the AGM some years ago. It was overwhelmingly defeated by the members who expressed their confidence in him. Had he been kicked out then, it's just possible that a new MD might have prevented the Society from its current bankruptcy.



Brendan


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## Robin Banks (22 Dec 2009)

Brendan said:


> You miss the point completely.
> 
> The purpose of the legislation is so that the person can be positively and definitely identified.


 
As do you.

The purpose of the legislation is to set a benchmark to legally establish identity in case of money laundering.

If the legislation is not complied with, and a crime is subsequently committed, the first thing the defendant's legal team will fall back on is the financial institiution's failure to comply with proper procedures in opening the account.

They can use this to establish "reasonable doubt" as the required procedures were not complied with, therefore my client gets off scott free. And now my client is going to sue the State (ie everyone else) for bismirching their otherwise impeccable character.

But we are prepared to take a high six figure settlement, to make it all go away quietly.

That's how de game is played in Ireland Brendan.

What rock do you live under?


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## Sunny (22 Dec 2009)

Brendan said:


> I have been the most vociferous critic of Michael Fingleton and the Irish Nationwide over the years. Criticising them over minor technical issues, diverts attention from the much bigger issues.
> 
> I put down a motion of no confidence in Fingleton at the AGM some years ago. It was overwhelmingly defeated by the members who expressed their confidence in him. Had he been kicked out then, it's just possible that a new MD might have prevented the Society from its current bankruptcy.
> 
> Brendan


 
This is what I don't understand Brendan. Everyone knew what was going on in Irish Nationwide and yet so few people seemed to be willing to do anything about it. The question has to be asked if his political ties helped him especially with regard to the regulator. The wider investment community who funded them also have questions to answer. I know that doesn't explain the members lack of support for your motion but I think that can be explained by the $ signs flashing before their eyes!


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## canicemcavoy (22 Dec 2009)

Brendan said:


> I put down a motion of no confidence in Fingleton at the AGM some years ago. It was overwhelmingly defeated by the members who expressed their confidence in him. Had he been kicked out then, it's just possible that a new MD might have prevented the Society from its current bankruptcy.


 
Brendan, I'm interested to know why you consider Fingleton far worst than any of the other banking leaders. Note that I'm not defending him in any way; I'm pointing out that they have all been just as reckless. As taxpayers, we're having to bail them all out.

Also, was the motion of no confidence related to demutualisation rather than Irish Nationwide's lending practises?


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## Robin Banks (22 Dec 2009)

canicemcavoy said:


> I'm not defending him in any way; I'm pointing out that they have all been just as reckless. As taxpayers, we're having to bail them all out.


 
Fingers only has €8 billion going into NAMA, Seanie has €28 billion.

Seanie must have been 3.5 times more confident and positive about the Irish "economy".

Shame on you Fingers.


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## VOR (22 Dec 2009)

Delboy said:


> 1 thing has always puzzled me in this whole sorry episode....how come no journalist worth his salt was breaking stories on this...i.e. talking to sources in the banks or the regulator, disgruntled developers who were'nt getting the same treatment, some politician with a conscience keen to reveal what was going on so as to maybe get at Bertie, etc etc


 
I would be very interested to find out who the journalists were who benefitted from this cosy relationship. I wonder if they work in the property sections??


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## Delboy (22 Dec 2009)

well if Prime Time were able to name the policiticans last night,why did'nt they also name the sports stars and journalists that they referred to....


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## Robin Banks (22 Dec 2009)

Our journalists unfortunately descended to a collection of corporate lackeys participating in the collective delusion accurately described as groupthink by Morgan Kelly in the Primetime episode.

The 'property bubble ostrich' moderation policy adopted by this site was a shining example of that groupthink in action.


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## Brendan Burgess (22 Dec 2009)

canicemcavoy said:


> Brendan, I'm interested to know why you consider Fingleton far worst than any of the other banking leaders. Note that I'm not defending him in any way; I'm pointing out that they have all been just as reckless. As taxpayers, we're having to bail them all out.
> 
> Also, was the motion of no confidence related to demutualisation rather than Irish Nationwide's lending practises?



It was  April 2003. I will see if I can find the text of the submission I made to members. 

We had three motions that year

Resolutions 1 deals with demutualisation and with the carrying out of a diligence report. 
Resolution 2 calls for a vote of no confidence in managing director, Michael Fingleton. 
Resolutions 3 calls for the introduction of a standard variable rate and payback of exorbitant penalty fines imposed on borrowers who fell behind in their loan repayments. 



My main issue has always been the manner in which he treated people in arrears - 20% penalty interest, miscalculation of arrears, not passing on interest rate cuts.   I have often spoken about the way he treated the Irish Nationwide as his own personal fiefdom. Not sure if this featured at the time. He was also threatened with jail for not following a judge's order. He refused to direct the Isle of Man(?) branch to cooperate with one of the Tribunals. 



The Financial Regulator found that the manner in which the Irish Nationwide conducted the ballot on these motions was "in cotravention of the legislation" But other than naming and shaming the Society 18 months after I made a complaint, they took no action.



My main concern was with small borrowers. I was not aware of reckless lending by the Irish Nationwide.


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## Mpsox (22 Dec 2009)

Sunny said:


> Everyone knew what was going on in Irish Nationwide and yet so few people seemed to be willing to do anything about it. The question has to be asked if his political ties helped him especially with regard to the regulator. The wider investment community who funded them also have questions to answer. I know that doesn't explain the members lack of support for your motion but I think that can be explained by the $ signs flashing before their eyes!


 
I think you've touched on a very important point here, basically, as long as everyone was making money, the vast majority of people didn't give a damm what was going on in Irish banking, because the value of their assets were going up, their taxes were falling and the national infrastructure was being improved. 

To me, a number of key things happened in Irish banking over the last number of years. Firstly was the move towards short term sales targets within the banks, away from looking at the customer as a long term investment. Whether or not a mortgage or investment product suited an individual in the long term didn't matter, it all became about making this months/quarters sales targets, and never mind the quality. I thought the ACC guy made a valid point when he spoke about the office car park being full of Mondeos one years and BMWs the next. Bankers traditionally should have managed risk with sales and customer service, that no longer mattered, traditional bankers were replaced by sales people

Secondly, regualtion was (and still is ) a joke, I know people who worked in Reg Risk in some of the Irish banks, as one of them put it to me, all you had to do was answer the questions you were asked, volunteer nothing else, they (the Regulator) didn't really know what they were talking about anyway. The same applied to Corporate Governance, what happened with the DDA and the Irish Glass bottle site is like something out of a tin pot 3rd world country, not a "sophisticated" 1st world economy

Incidentally, for all those people who got loans without Irish Nationwide following due diligence and money laundering processes, I have to wonder if there is a case for mis-selling there?


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## Calico (22 Dec 2009)

I know it's a very dangerous thing for the state to take action which contravenes the law, but as I watched this program last night I believe it's time that regardless of the legalities that the pensions, assets etc. are seized from these people. A good place to start would be the pensions of Michael Fingleton (€28m) and Sean Fitzpatrick (€25m).


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## TarfHead (22 Dec 2009)

Sunny said:


> Everyone knew what was going on in Irish Nationwide and yet so few people seemed to be willing to do anything about it.


 
From the outside .. I would assume that many people were just willing on Fingleton to float Nationwide so that they could cash in on their windfalls ?


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## Complainer (22 Dec 2009)

TarfHead said:


> I would assume that many people were just willing on Fingleton to float Nationwide so that they could cash in on their windfalls ?


Indeed they were. What they failed to notice was that Fingleton never had any intention of floating, because this would have meant losing control over his personal fiefdom.


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## Brendan Burgess (22 Dec 2009)

[broken link removed]



> Fianna Fáil needs to answer questions regarding it relationship to Irish Nationwide Building Society after RTÉ's _Prime Time Investigates_  programme last night reported a number of party figures had access to loans from the lender on “easy terms”, Labour’s finance spokeswoman has said.
> Joan Burton described disclosures regarding the operation of a system of favoured relationships at the bank as “particularly disturbing”.



Is this what the programme alleged? Loans for many people including 4 named FF politicians were fast-tracked. But I thought that the programme went out of its way to say that there was no evidence of the loans being on favourable terms? Anecdotally, Fingleton is reputed to have never given anyone a good deal. 

The only issue raised is that they were fast-tracked as far as I can see. 

I would guess that some FG TDs have mortgages with the Irish Nationwide. Maybe even a Labour TD or Senator has a mortgage with the Irish Nationwide. 

I presume that the majority of TDs and Senators have mortgages. If we discovered that 10 Labour TDs had their mortgages with the EBS, would we be raising such a fuss? 

Having said all that, I still don't understand why the Financial Regulator did not put the boot into Michael Fingleton and the Irish Nationwide. I had always wondered if it was due to their political connections. But I think it's more likely due to a general tendency of the Financial Regulator not to enforce.


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## elcato (22 Dec 2009)

> To me, a number of key things happened in Irish banking over the last number of years. Firstly was the move towards short term sales targets within the banks, away from looking at the customer as a long term investment. Whether or not a mortgage or investment product suited an individual in the long term didn't matter, it all became about making this months/quarters sales targets, and never mind the quality.


'Supermarket banking' I believe the term is.


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## Sunny (22 Dec 2009)

Thought the new head of the Central Bank was interesting. Certainly said the right things and sounded tough so fingers crossed. 

I have to say though, I do think it is pretty disgusting the way these guys sail off into the sunset and leave everyone else to pick up the pieces. I don't begrudge anyone earning a high salary but the one thing that really bugs me is lack of accountability when things go wrong. Walking off into retirement with huge pensions is not taking responsibility.


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## dewdrop (22 Dec 2009)

Just on the point of identification i thought it was a legal requirement to provided the necessary documentation. The fact that you were well known had no  relevance.  I am a retired bank manager with a bank account. when sometime ago i approached the bank where i previously worked to open an annother account i had to come home to get the required documents.


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## canicemcavoy (23 Dec 2009)

Brendan said:


> There is simply no comparison between tax evasion and not completing the required paperwork for a bank loan.
> 
> The paperwork for money laundering is hugely inappropriate. Under the law, *Charlie McCreevy would have had to provide a passport and two utility bills. *


 
God love him, Brendan. Seriously, I find it worrying that a consumer advocate thinks that some laws are only for the little people. Nodding and winking has gotten us into this mess in the first place. Whether or not the paperwork is inappropriate, it's the law.


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## csirl (23 Dec 2009)

It appears that nothing has changed since the 1980s when banks routinely gave special treatment to prominent politicians e.g. writing off loans. 

The big question is what were the banks getting in return? Banks are commerical enterprises. No business gives away favours unless they are expecting something in return which will improve the bottom line. 

I've also heard that it may not just have been the fast tracking of loan applications etc. - connected individuals may have been set up with jobs in some banks.


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## suemoo1 (23 Dec 2009)

+1 if this were america they'd be jailed or at least held accountable..
this country needs a complete clean out from the top down banks and gov included


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## Shawady (23 Dec 2009)

Funny enough, the part of the programme I found striking was when Berite was questioned about an article stating that the economy was vulnerable, he laughed it off and was quite dismissive of the economist involved. He refered to him as 'I can't remember which whizzkid wrote this'.
He really came across as not wanting to face up to reality.


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## Luternau (23 Dec 2009)

A few things struck me ;
INBS fast track application process did not take into account the alility of the applicant to pay it back (it was said that the decision to loan to CMcC or some other party made before the application was recieved). This is just crazy, and if its not wrong in current law, it should be made illegal. 
If politicians were able to be named, why not the sports persons too? Fair is fair-if what happend was not wrong (fast tracking) why not name them too?
The show needed the an insider to make it stand out from other programmes on the topic. However I am curious as to what would make someone break a confidentiality agreement in such a public way.
Is this because it has been determined that the agreement was badly drafted (maybe it was also fast tracked ), or maybe the legal advice is that INBS will not be around long enough as a legal entity to enforce the agreement, or maybe RTE have decided (at licence payers expense) to underwrite any claim/judgement against her in the interest of the public record. I certainly hope the latter is not the case.


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## Complainer (24 Dec 2009)

Wouldn't it be interesting to know if McCreevy was claiming 107% of tax relief on his 107% LTV loan; [broken link removed]


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## AlbacoreA (24 Dec 2009)

There should be some accountability from the banks, for giving loans/mortgages to people who could never afford them.


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## Locke (24 Dec 2009)

AlbacoreA said:


> There should be some accountability from the banks, for giving loans/mortgages to people who could never afford them.


 
Totally agree, they should share it with the people who spent €300,000 on the 1 Bed Apartments (who would probably be complaining if the banks didn't give that mortgage)


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