# Will the banks get natonalised??



## tmurphy1 (8 Jun 2009)

If FG take control will they try to Nationalise the 2 main banks?
 I know Labour want to but is it very likely if FG take over from FF?


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## PaulHoughton (9 Jun 2009)

FG's policy is to create a new bank (government owned, maybe) with the 'capacity to lend'. They would then not renew the guarantee scheme that runs out in 2010 possibly resulting in the demise of the existing banks, with losses for their bondholders and shareholders.

Current bookmaker odds are that FG will be in government by 2010 so there is a chance that this policy will come to pass.

http://www.finegael.org/upload/file/Local Strength National Recovery 1.pdf


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## Sunny (9 Jun 2009)

PaulHoughton said:


> FG's policy is to create a new bank (government owned, maybe) with the 'capacity to lend'. They would then not renew the guarantee scheme that runs out in 2010 possibly resulting in the demise of the existing banks, with losses for their bondholders and shareholders.
> 
> Current bookmaker odds are that FG will be in government by 2010 so there is a chance that this policy will come to pass.
> 
> http://www.finegael.org/upload/file/Local Strength National Recovery 1.pdf


 
Believe me, they will change their mind when they get into power. The guarantee will be extended shortly so FG won't have the option. Its very easy for them to sit in opposition and spout off ideas about creating a new bank and running down the current ones but I bet they have no idea on how to actually achieve this. I don't agree with everything that FF has done with regard to the banking crisis especially with regard to Anglo and Irish Nationwide but I do think they have got more things right than wrong.
As for the OP's question, nobody knows. I certainly wouldn't bet against Nationalisation of the big two but it will be a last resort. The State will end up owning a majority share I would imagine but I can't see them running to nationalise them.


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## Duke of Marmalade (9 Jun 2009)

Totally agree with _Sunny_ on this one. That is a disgraceful bit of populism in the FG manifesto. 





> Fine Gael believes that this alternative model *deserves serious*​
> *assessment* and *could* offer a much better use of scarce taxpayers' resources


This closing statement is their out. They know the proposal is in practical terms bunkum. If George Lee approved this bit of chicanery, shame on him.


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## tiger (9 Jun 2009)

Sunny said:


> ... I do think they have got more things right than wrong...


I disagree, I think their approach has been one to delay/avoid making decisions or spending money with the hope that things will sort themselves out, which will make things worse in the long term, but we won't know this for sure for another 5-10 years.


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## Sunny (9 Jun 2009)

tiger said:


> I disagree, I think their approach has been one to delay/avoid making decisions or spending money with the hope that things will sort themselves out, which will make things worse in the long term, but we won't know this for sure for another 5-10 years.


 
I am not sure how you can you claim they delayed/avoided making decisons or spending money (considering the billions that have been spent). You may criticise the decisions taken but they certainly can't be accused of not making them and they deserve credit for that. Of course they tried not to spend taxpayers money and they should have made the banks face up to reality a lot earlier than they did but to fair to the politicians, their own regulator and central bank was telling them everything was ok and the banks were only facing liquidity concerns, not solvency.
Like I say, I don't agree with every decision taken but there is no point deluding ourselves into thinking that FG or labour would have done anything different despite all their shouting from the sidelines.


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## Duke of Marmalade (9 Jun 2009)

I'm no FF'er and certainly with hindsight they could have been a bit more circumspect in managing the boom, (could we really afford an OAP and public service salaries twice that in the UK?). They effectively conned and bought their unexpected win in the last election.

But with FG talking about a totally self delusory silver bullet and Labour ideologically wedded to nationalisation, the irony is that only FF can now be trusted with handling the banking crisis.

There's 3 years to go to a GE and NAMA might just be seen to be working by then. FG and Labour may live to regret that they set themselves so firmly against the proposal.


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## tiger (9 Jun 2009)

I think they were railroaded into a bank guarantee based on false information, without really questioning it, and without holding the bankers to task.

If I'd been minister for finance, and a bunch of bankers turned up on my door at 9 o'clock at night saying the system was in danger of total collapse, I would have probably given the guarantee, but I would have asked for the resignation of all directors & senior managers to be offered in return. (Not that they necessarily would all have been accepted...)


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## tiger (9 Jun 2009)

Duke of Marmalade said:


> ...There's 3 years to go to a GE and NAMA might just be seen to be working by then....


As they like saying over on the propertypin, "it's the empties stoopid".
Billions have been spent on sites & houses in the middle of no where that will never be worth any money.


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## PaulHoughton (10 Jun 2009)

Sunny said:


> Believe me, they will change their mind when they get into power. The guarantee will be extended shortly so FG won't have the option. Its very easy for them to sit in opposition and spout off ideas about creating a new bank and running down the current ones but I bet they have no idea on how to actually achieve this.


I think you're probably right. You can say anything in opposition.


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## Perplexed (10 Jun 2009)

I don't think the banks will be nationalised.
Has it not been the case in the past that when businesses are nationalised they become unprofitable ?
Banks in the past have been very profitable, even long before the boom. Anglo was never a model of your typical bank. Isn't it possible that given the chance the big two at least could rise again & pay back the billions to the Govt ? I think it's best to at least give it a chance to work.
The fact that the share prices are going up again means that someone has confidence in the market.


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## Teatime (14 Jul 2009)

It's a hunch I think AIB will be nationalised within a 2-3 weeks from now.


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## Dublander (15 Jul 2009)

have they even tried offloading their polish division yet?? If not I think it is a bit early to be thinking that they will be nationalised soon


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## canicemcavoy (20 Jul 2009)

Teatime said:


> It's a hunch I think AIB will be nationalised within a 2-3 weeks from now.


 
Is the Liam O'Carroll situation the beginning of the end?

[broken link removed]



> As one of the few AAA-rated financial institutions left standing, it simply doesn’t need it. There will be no happy ending to the Irish property bubble and if you are not in too deep, it’s long past time to cut and run.
> It raises some very interesting questions for our banks and more pertinently the directors of Allied Irish Banks (AIB) and Bank of Ireland. Given that their counterparts at Rabobank are better bankers than they are – having retained their triple-A status – why are they not doing what it is doing and liquidating Zoe and the other troubled developers?
> The reason is obvious.
> Applying for court protection Zoe said that if the group of six companies, which have total debts of €1.2 billion, was liquidated, they would have a deficit of €900 million. Based on this writedown value, properties on which it has borrowed €1.1 billion from eight banks would fetch €275 million if they went on sale this morning.
> *That means a 75 per cent writedown for the banks.* For ACC it means a loss of about €100 million, which is more than manageable for Rabobank. For AIB it is proportionally larger €367 million. For Bank of Ireland, which is owed €113 million, it is €84 million. But when you apply it across the rest of the distressed part of its commercial property book, which would be the consequence of liquidating the other insolvent property companies, you really are looking into the abyss.


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## morning123 (21 Jul 2009)

OK all you business buffs. These figures are just beyond most ordinary people's comprehension. Even the politicians are befuddled! They really do not know what to do. I think we are all relying on Lisbon Treaty to somehow jolt Europe into giving us a digout if we are on a Yes kick. Look, something has to be done now not in 3 months time, what are we waiting for? the IMF. Everyone knows the very first thing they did coming into Iceland was increase mortgage rates to 18%. Mercy, help, mortgage repayments going thro the roof. 
OK everyone says we are lucky to be part of the EU but for how long? 
We are now at the mercy of Europe, there is nowhere else to go. Polititians, get real, nationalise the banks, get moving on Bord Snip's ideas, increase taxes (we were paying 56% in the IR£ for single people when AIB caused a national crisis in 1985 with ICI and had to be bailed out. We have only stopped paying for that within the last couple of years). Get real, people, do whatever has to be done to get out of this. If we wait for govt to come back from hols we will be totally in the soup. If we are borrowing €400m pw now + 3 mths, what does that bring us up to?


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## Duke of Marmalade (21 Jul 2009)

What about today's Irish Times?





> Mr Fleming paid €245M for the Rockbrook site. The office block due to be developped there would cost €20M to build and when completed would fetch €10M.


 Hey, that's more than 100% writedown in my book. Morgan Kelly has been right on the scale of this disaster and yet bank shares are reasonably buoyant these days. I don't understand any of it.


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## pudds (21 Jul 2009)

morning123 said:


> OK all you business buffs. These figures are just beyond most ordinary people's comprehension. Even the politicians are befuddled! They really do not know what to do. I think we are all relying on Lisbon Treaty to somehow jolt Europe into giving us a digout if we are on a Yes kick. Look, something has to be done now not in 3 months time, what are we waiting for? the IMF. Everyone knows the very first thing they did coming into Iceland was increase mortgage rates to 18%. Mercy, help, mortgage repayments going thro the roof.
> OK everyone says we are lucky to be part of the EU but for how long?
> We are now at the mercy of Europe, there is nowhere else to go. Polititians, get real, nationalise the banks, get moving on Bord Snip's ideas, increase taxes (we were paying 56% in the IR£ for single people when AIB caused a national crisis in 1985 with ICI and had to be bailed out. We have only stopped paying for that within the last couple of years). Get real, people, do whatever has to be done to get out of this. If we wait for govt to come back from hols we will be totally in the soup. If we are borrowing €400m pw now + 3 mths, what does that bring us up to?



Anglo oirish should have been let go under and possible a few others too but the government had its fingers in a lot of pies and couldn't let this happen, so now the unemployed, the sick and the old (where did you hear those terms in the past) have to make cut backs so the rich can continue to live in the style their acustomed  to, recession or no recession.

White collar crime, oh sorry we dont have any in this country.


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## PaulHoughton (22 Jul 2009)

Duke of Marmalade said:


> What about today's Irish Times?
> 
> 
> 
> ...


I don't think this development is anywhere near the worst. He didn't pay 245m for a site to build a single office tower, this was just the flagship element. It consists of 11 acres with approx 1,000 apartments and around 25,000 sqm of retail/commercial. It's in Dublin, on the luas and near to jobs and surrounded by good residential areas. Even at 150k per apartment, the development is worth a couple of hundred million. The banks may have lost 60% but there's something there.

Worst asset class has to be land banks in rubbish locations with massive oversupply of housing and no work. Land 100km from dublin with only agricultural value mortgaged for hundreds of millions. 100% loss.


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## Duke of Marmalade (22 Jul 2009)

Thanks for clarification, Paul, which comes as a genuine relief.  The Irish Times should be more careful how they report these matters.


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## z109 (22 Jul 2009)

Duke of Marmalade said:


> What about today's Irish Times? Hey, that's more than 100% writedown in my book. Morgan Kelly has been right on the scale of this disaster and yet bank shares are reasonably buoyant these days. I don't understand any of it.


As Paul says, that's not all the stuff on the site. If they continue to build, the losses could be even bigger...

As for the share price, the markets are betting that the taxpayer will be taking the losses, not the banks. NAMA, as currently proposed, is their friend.


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