# Newbridge credit union



## Sunny

We just handed over €54 million of taxpayers money to bail out a credit union after a court case heard in secret on a Sunday night. It is now 2pm and I have still not heard from Enda Kenny, Michael Noonan or anyone from the central bank. Were these not the same guys in opposition screaming about cloak and dagger stuff on the night of the bank guarantee. They really are spineless. I am sure they will be rushing to be on the evening news once the spin doctors have had a day to get everyone on message. Enda Kenny and his lack of engagement with the media at this stage is frankly embarrassing.


----------



## dereko1969

http://www.irishtimes.com/business/...-don-t-apply-to-other-credit-unions-1.1591144

There ya go.

Why did the members in Newbridge who are now protesting not query the huge loans given to developers during the boom by their loans committee?


----------



## Shawady

It wasnt only loans to developers. I know some that was in trouble with them a couple of years ago. He was given lots of small top up loans and ended up owing them an unsustainsble amount. He certainly had got nowhere near the savings required to receive that loan.


----------



## Conan

What seems bizzare is that those protesting about the takeover seem to want the State to put in the €50m but still leave the same people in charge. In comparison to Credit Union offices around the country, Newbridge seem to have invested millions into a plush office for its employees. And now that the value of the building has fallen (like most other properties) the CU refuses to write down the value of the building in its Accounts. That alone, apart from the apparent poor credit policy, justifies the decision to move the management. 
The alternative is liquidation and how would protesters feel about that?


----------



## Sunny

The amazing thing is that they still think the place is solvent. Even Naas credit union ran a mile for Gods sake.


----------



## Paddyman

Conan said:


> What seems bizzare is that those protesting about the takeover seem to want the State to put in the €50m but still leave the same people in charge. In comparison to Credit Union offices around the country, Newbridge seem to have invested millions into a plush office for its employees. And now that the value of the building has fallen (like most other properties) the CU refuses to write down the value of the building in its Accounts. That alone, apart from the apparent poor credit policy, justifies the decision to move the management.
> The alternative is liquidation and how would protesters feel about that?



Plenty of other CU's went that route. Look at Carlow and Bagenalstown!


----------



## ajapale

dereko1969 said:


> Why did the members in Newbridge who are now protesting not query the huge loans given to developers during the boom by their loans committee?



Yes, why should ordinary decent prudently managed credit unions (or the tax payers) bail out Newbridge Credit Union for very poor management over a decade or more?



Paddyman said:


> Plenty of other CU's went that route. Look at Carlow and Bagenalstown!


 What route did Carlow and Bagenalstown take?


----------



## Brendan Burgess

*Why are Newbridge members not welcoming ptsb?*



> At an impromptu meeting in the Kildare town’s community centre yesterday, [broken link removed]  vowed to fight the takeover by Permanent TSB once it had sought legal  advice based on Central Bank documentation. About 100 members showed up  to vent their frustration at the [broken link removed] order.
> 
> 
> 
> Permanent  TSB is receiving €53.9 million from the Credit Institutions Resolution  Fund to make good on the losses incurred at Newbridge Credit Union. This  transaction, approved by the High Court late on Sunday night, was made  with the approval of Minister for Finance [broken link removed] following a request from the Central Bank.
> 
> 
> 
> While  the fund was established in 2011 with a €250 million contribution from  the Government, the money is recoupable from the financial sector via a  levy.


Newbridge Credit Union is in some sort of trouble and we can argue about the severity of that trouble. But if the Central Bank's assessment is right, the members would have lost a large part of their savings. Of course, they are not at risk because of the government guarantee.  

If the government guarantee was not there, I presume that the members would have taken all their money out of the Credit Union and it would have collapsed. 

Even with the government guarantee, Newbridge would not be able to pay dividends on its members shares for many years to come. 

If Newbridge is in as bad a state as the Central Bank reports, then why on earth would another credit union get involved in rescuing it. Again, only because the government pumps money into it. 

The CB should offer the members a choice - Get taken over by ptsb or stay independent. But if you stay independent you lose the government guarantee.


----------



## Bronte

Why was the court case heard in secret. If PTSB will be at zero loss from taking over the credit union, having been paid 53 million, why didn't the central bank give the 53 million to Naas credit union to take over Newbridge. Was the offer even on the table. And if not why not. 

Alternatively why not give Newbridge itself 53 million in return for a change of management, those that mis managed shouldn't be rewarded and continue in a position of trust. Though as I write this I think of the bailed out banks, where plenty of management stayed in place or walked away with gold handshakes. 

If the government was truly committed to choice for consumers, in banking, why restrict that choice to a failed bank taking over a credit union.

Who identified the figure of 53 million. Was it Newbridge, the Central bank, or did PTSB decide the figure. Did Naas know of the 53 million deficiet.

Someone mentioned if the CU went into liquidation that savers would lose out. But how so, what percentage of the savers would have more than 100K in savings in a single account. Anyone with that kind of money would have known about the rumours about this credit union for many months now and would have reduced their exposure to nil by bringing their saving to 100K. If there is any individual, or institution that has more than 100K, than after all that has passed in the last 7 years, they are idiots.

While talking about those with more than 100K. It's very odd, to me, that there would be a lot of people with such large lump sums in an institution that is known to have issues or even one where there are no issues. Surely at this stage there is nobody that keeps more than that in any one place.

If the government try this tack with my credit union, or my husband's we will move to another credit union.  No way would I accept going to a bank.  I cannot wait until the day I never have to deal with a bank again.


----------



## Brendan Burgess

Hi Bronte

A lot of interesting points there.



> why didn't the central bank give the 53 million to Naas credit union to take over Newbridge.


The Central Bank did agree to indemnify Naas against losses from Newbrige. I am not sure of the mechanism, but I think it was from a direct input of cash.



> why not give Newbridge itself 53 million in return for a change of management


Newbridge failed as a Credit Union and I think it's right to close it down.  I would go further and say that the members should have lost their money, but that is not government policy.  



> why restrict that choice to a failed bank taking over a credit union.


They tried to get Naas to take it over, but they refused. The CB had no other option.



> Who identified the figure of 53 million. Was it Newbridge, the Central  bank, or did PTSB decide the figure. Did Naas know of the 53 million  deficiet.


I suspect that it was ptsb who insisted on a figure this high. 



> If there is any individual, or institution that has more than 100K, than  after all that has passed in the last 7 years, they are idiots.


I heard somwhere that there was only €2m in excess of €100k.  So most did take it out. 



> If the government try this tack with my credit union, or my husband's we  will move to another credit union.



All the depositors in Newbridge/ptsb are free to withdraw their money and put it wherever they like. I presume that Naas and other local Credit Unions will accept them as members. But if all the deposits in Newbridge went to Naas, it would cause huge problems for Naas.


----------



## Bronte

Brendan Burgess said:


> The Central Bank did agree to indemnify Naas against losses from Newbrige. I am not sure of the mechanism, but I think it was from a direct input of cash.
> 
> Newbridge failed as a Credit Union and I think it's right to close it down. I would go further and say that the members should have lost their money, but that is not government policy.
> 
> I suspect that it was ptsb who insisted on a figure this high.
> 
> I heard somwhere that there was only €2m in excess of €100k. So most did take it out.
> 
> But if all the deposits in Newbridge went to Naas, it would cause huge problems for Naas.


 
If the CB agreed to indemnity Naas, that it doesn't make sense that Naas refused the business. 

We didn't close down many of the banks that failed, so I don't agree that we should close down Newbridge by getting a failed bank to take it over and apparently said bank has dictated the figure to the CB. PTSB are as good as the Newbridge lot. So a wipeout of management at Newbridge would equally have been as good a solution, in my opinion. And if PTSB dictated the 53 million, would a new board of management at Newbridge have cost less. 

Re the 2M. So if Newbridge went bust, some people would have lost 2 Million, but everbody else would have been fine. Would the vast majority of people have been better off if Newbridge were liquidated. 

Why would it be a problem for Naas if all the deposits went to Naas, in any case if people were moving, they'd also like to move their loans.

Interesting that the PTSB have 'hinted' that they will pay the Newbridge clients an unspecified 'dividend.' Sounds like bribary to me, and using our taxpayer money to do it too.  Bit like AIB making it's staff redundant and giving them more than statutory with once again, our taxpayers money.  They are all so amazingly generous.


----------



## Purple

Paddyman said:


> Plenty of other CU's went that route. Look at Carlow and Bagenalstown!



Look at Rathfarnham CU. They must have been going for an award for the ugliest building of the year when they built that.


----------



## Bronte

Purple said:


> Look at Rathfarnham CU. They must have been going for an award for the ugliest building of the year when they built that.


 
Did a lot of credit unions buy/build new offices during the boom?


----------



## ontour

Brendan Burgess said:


> I presume that Naas and other local Credit Unions will accept them as members. But if all the deposits in Newbridge went to Naas, it would cause huge problems for Naas.



The other credit unions can not accept them as members as their common bond does not cover the geographic area that Newbridge credit union covered.  There is talk of extending the common bonds in which case Naas could open a sub office in Newbridge and start from a clean slate.

Deposits are a huge problem for the credit unions, with more money going in to reserves and other money that credit unions have on deposit with the banks making very little interest, the credit unions are relying on a shrinking loan book to cover increased operational costs.  There are few credit unions that would welcome a large influx of deposits.


----------



## wbbs

Many did, some very plush offices around the country!


----------



## Bronte

wbbs said:


> Many did, some very plush offices around the country!


 
Well it would presumably be very silly to sell them in the current market.


----------



## newirishman

Bronte said:


> Why was the court case heard in secret. If PTSB will be at zero loss from taking over the credit union, having been paid 53 million, why didn't the central bank give the 53 million to Naas credit union to take over Newbridge. Was the offer even on the table. And if not why not.
> 
> Alternatively why not give Newbridge itself 53 million in return for a change of management, those that mis managed shouldn't be rewarded and continue in a position of trust. Though as I write this I think of the bailed out banks, where plenty of management stayed in place or walked away with gold handshakes.
> 
> If the government was truly committed to choice for consumers, in banking, why restrict that choice to a failed bank taking over a credit union.



Why not just let the CU fail? Hardly "too big" or of any systemic relevance.



Bronte said:


> Who identified the figure of 53 million. Was it Newbridge, the Central bank, or did PTSB decide the figure. Did Naas know of the 53 million deficiet.
> 
> Someone mentioned if the CU went into liquidation that savers would lose out. But how so, what percentage of the savers would have more than 100K in savings in a single account. Anyone with that kind of money would have known about the rumours about this credit union for many months now and would have reduced their exposure to nil by bringing their saving to 100K. If there is any individual, or institution that has more than 100K, than after all that has passed in the last 7 years, they are idiots.
> 
> While talking about those with more than 100K. It's very odd, to me, that there would be a lot of people with such large lump sums in an institution that is known to have issues or even one where there are no issues. Surely at this stage there is nobody that keeps more than that in any one place.
> 
> If the government try this tack with my credit union, or my husband's we will move to another credit union.  No way would I accept going to a bank.  I cannot wait until the day I never have to deal with a bank again.




I  guess the the two reasons for not letting it go down is that it might be  more expensive for the taxpayer due to the €100K savings guarantee, and that the government doesn't want to put any uncertainty around the CU's.
Personally after living in Ireland for more than a decade I still don't understand what the point of the credit unions is t.b.h. 
Must be cultural.


----------



## wbbs

The point of credit unions as far as I can see is to give people who the banks have no interest in lending to access to credit, if you are not in that category then I can see how you would not understand what credit unions do.  Admittedly some lost the run of themselves but there are still some very well run ones around that give a very valuable service.


----------



## Sunny

There is no reason to save it. Apparently a school, a charity and a couple of hundred individuals had over €100k on deposit. Am sorry for them but it is their own problem. Everyone is aware of the risks. This is taxpayers money again being used. If they need more than €250m for credit unions, they levy the banks so again consumers will end up paying for it. I could understand not allowing a bank fail back in 2008 considering the environment at the time but I struggle to understand this. There wouldn't be any contagion. The issues with credit unions are well known at this stage. If RSA didn't have a strong parent, we would have to have bailed them out as well. Where does it all end?


----------



## Sunny

wbbs said:


> The point of credit unions as far as I can see is to give people who the banks have no interest in lending to access to credit, if you are not in that category then I can see how you would not understand what credit unions do.  Admittedly some lost the run of themselves but there are still some very well run ones around that give a very valuable service.



I agree there are some really well run credit unions but there are some shocking ones being run by amateurs albeit good intentioned amateurs for the most part.


----------



## newirishman

wbbs said:


> The point of credit unions as far as I can see is to give people who the banks have no interest in lending to access to credit, if you are not in that category then I can see how you would not understand what credit unions do.  Admittedly some lost the run of themselves but there are still some very well run ones around that give a very valuable service.



Thanks. 
The first part of your reply sounds to me like classic sub-prime lending territory.
I have not doubt that many of them are well run.


----------



## wbbs

Not really, we are talking about a few hundred quid for Christmas or to pay for back to school or buy a cheap car, not the banks hunting ground.  Small loans like that is the bulk of credit union stuff, most of which would have been repaid fine if so many had not lost their jobs.


----------



## Paddyman

Now anything over €200 loan requires a full financial history including spending on daily meals. Information gathering Inc.


----------



## tallpaul

Paddyman said:


> Now anything over €200 loan requires a full financial history including spending on daily meals. Information gathering Inc.


 
I don't see what is wrong with this. If Newbridge had been doing this all along, they wouldn't be in the mess they are in.

Frankly I'm aghast at the antics of the protestors outside Newbridge CU yesterday. If they are so dead set against the transfer to PTSB, the Government should have liquidated it or given savers 10c on the euro. Then they would have had something genuine to moan about.

Whingeing about the loss of the Credit Union ethos when the Amateur- Hour Board got so far over their heads that the taxpayer has to stump up €54 million is laughable. How can you have bakers/dentists/plumbers or whatever that generally make up the Boards of CU's deciding on multi-million euro loans in this day and age???

It is also typical, why blame the actual culprits when you can blame the Government instead!!

By baling Newbridge out, they have set the precendent for the inevitable next one to be baled out due to over extension by amateur bankers...


----------



## Purple

+1 tallpaul.


----------



## Petermack

Interestingly it is reported today that Naas CU wanted a figure of €69 million to merge with Newbridge CU. They were looking for a cash sum of €48 million and €21 in loan guarantees.

I wonder if the PTSB fugure of €54 million includes any element of loan guarantee or is it just a striaght cash payment


----------



## dereko1969

Purple said:


> Look at Rathfarnham CU. They must have been going for an award for the ugliest building of the year when they built that.


 
Whilst it is an eyesore, that building was built well before the boom in fairness.


----------



## ontour

tallpaul said:


> Frankly I'm aghast at the antics of the protestors outside Newbridge CU yesterday. If they are so dead set against the transfer to PTSB, the Government should have liquidated it or given savers 10c on the euro. Then they would have had something genuine to moan about.



It is important to recognise that there are 37,000 members of Newbridge credit union and by the looks of the RTE footage there were less than 37 at the protest and meeting.  I am sure there are many members that are grateful for the bail out and would still like access to a credit union.


----------



## STEINER

Whats in this for PTSB? Is this a good deal for PTSB or is it a poisoned chalice?


----------



## joe-1

I'm sure there is a bit of profit among that 37,000 members somewhere for them.


----------



## joe-1

Is there any way of knowing how individual credit unions are performing or if they are in trouble?


----------



## Sunny

STEINER said:


> Whats in this for PTSB? Is this a good deal for PTSB or is it a poisoned chalice?



There is not much apart from getting the deposit book which will improve their liquidity ratios.


----------



## T McGibney

ontour said:


> It is important to recognise that there are 37,000 members of Newbridge credit union and by the looks of the RTE footage there were less than 37 at the protest and meeting.  I am sure there are many members that are grateful for the bail out and would still like access to a credit union.



Newbridge's population at last census was 21,561. Yet there are apparently 37,000 members in the credit union?

http://en.wikipedia.org/wiki/Newbridge,_County_Kildare


----------



## Brendan Burgess

STEINER said:


> Whats in this for PTSB? Is this a good deal for PTSB or is it a poisoned chalice?



See my calculations : 


The numbers behind Newbridge Credit Union

If they recover 40% of the loan book they will make a profit on the deal. 

Brendan


----------



## The_Banker

STEINER said:


> Whats in this for PTSB? Is this a good deal for PTSB or is it a poisoned chalice?


 
Did PTSB even have any say in this? They are losing 2.5m a day and are being kept open by the Troika and Dept of Finance so they were hardly in a position to say no.

Could it be a case of putting all the bad eggs in one basket?


----------



## dewdrop

Maybe good intentioned amateurs avoid running up large bad debts.


----------



## ontour

T McGibney said:


> Newbridge's population at last census was 21,561. Yet there are apparently 37,000 members in the credit union?



It would be a much larger area in the common bond including Newbridge, Allen, Suncroft, Two Mile House, Caragh.  ..and every ribbon development in between. Also people that previously lived in Newbridge may still have accounts.  Also the census only captures people who are resident in the area, people who work in the area are also eligible to join the credit union


----------



## demoivre

Who needs regulation when you have great auditors.


----------



## Petermack

Further reports today indicate that an average of €76k was being withdrawn every day from Newbridge CU since 27th July. In 1 week alone from July 27th to August 02nd there was a daily average of €536k leaving the CU.


----------



## RainyDay

T McGibney said:


> Newbridge's population at last census was 21,561. Yet there are apparently 37,000 members in the credit union?
> 
> http://en.wikipedia.org/wiki/Newbridge,_County_Kildare



A credit union Common Bond usually allows for people who live OR work in a given area to join. Though the number still seems high all right.


----------



## Bronte

Petermack said:


> Further reports today indicate that an average of €76k was being withdrawn every day from Newbridge CU since 27th July. In 1 week alone from July 27th to August 02nd there was a daily average of €536k leaving the CU.


 
Was this caused by the Central bank being involved. Is the run on deposits the cause of the current crisis? That's a heck of a lot of money to be haemorrhaging.

If the company had gone into liquidation would it have cost less than the 53 million to the Irish taxpayer.


----------



## ontour

The contention is that by liquidating the credit union, the value of the loan book would have been lower in a fire-sale resulting in a high cost to the taxpayer.

It would not appear that the situation has improved in Newbridge since the special manager was appointed however it can not be assumed that it would be any better if they had been left alone.

If property values recover, many of the issues are greatly reduced.  It is this aspiration that encourages the 'kick the can down the road' approach rather than taking immediate action.

Newbridge were making some large commercial type loans with bullet payments, it is fair to say that they had wandered far from the core market of credit unions.  Credit unions are going to have a challenging and expensive journey to find where they fit in to the financial services industry in the future.


----------



## Petermack

Bronte said:


> Was this caused by the Central bank being involved. Is the run on deposits the cause of the current crisis? That's a heck of a lot of money to be haemorrhaging.
> 
> If the company had gone into liquidation would it have cost less than the 53 million to the Irish taxpayer.


 

This is the article Bronte  [broken link removed]

The board of Newbridge CU issued a statement yesterday indicating that they are considering legal action against the Central Bank [broken link removed]


----------



## Bronte

Petermack said:


> This is the article Bronte [broken link removed]


 
I see that part of the problem is that the building is overvalued on the balance sheet. But isn't that the same story with Irish banks. That they are not putting a true value on the properties they have in NE?  How come that's ok for the banks but not a credit union?

How come Newbridge were giving out loans to property developers. Did this money come from the deposits of the shareholders? Did they make any money on these loans ever? Was this distributed as a dividend to the shareholders?


----------



## Sunny

Bronte said:


> I see that part of the problem is that the building is overvalued on the balance sheet. But isn't that the same story with Irish banks. That they are not putting a true value on the properties they have in NE?  How come that's ok for the banks but not a credit union?
> 
> How come Newbridge were giving out loans to property developers. Did this money come from the deposits of the shareholders? Did they make any money on these loans ever? Was this distributed as a dividend to the shareholders?



Banks don't really care about negative equity with regards to the value of their assets on their balance sheet. The asset is the mortgage, not the house. Negative equity only comes into play when looking at potential losses. 

It would be like BOI saying their headquarters is worth the same today as it was in 2006 and not writing down the value.


----------



## Brendan Burgess

HI Bronte

The value of buildings for most banks is not material. They could probably write them off and they wouldn't affect the reserves significantly. 

The problem with Newbridge is that the building cost €15m which is a very high proportion of their total assets. The nominal value of their loans was €140m, but this seems to have been written down to around €90m. 

Brendan


----------



## Bronte

Sunny said:


> Banks don't really care about negative equity with regards to the value of their assets on their balance sheet. The asset is the mortgage, not the house. Negative equity only comes into play when looking at potential losses.
> 
> .


 
Are you sure about this, don't they have to put down the true value of assets, in order to determine if they are liquid or not.  I don't see how morgages are assets.  If I own my house but it is mortgaged 100% I don't really have an asset.  And doesn't the central bank decide how much a bank is worth based on actual assets less liabilities.


----------



## Bronte

Brendan Burgess said:


> The problem with Newbridge is that the building cost €15m which is a very high proportion of their total assets.


 
Isn't the 15 million their only 'physical' asset. Why did all the reports hone in on this aspect. Just because it's now worth about 3 million, that's twopence in relation to the real issues. So far all I'm seeing is smoke and mirrors. I'd like to know what the central bank and the judge based the decision on. Which I would have hoped was cold hard figures.  And I don't understand if a solution had to be found, why it took years to do so.  Surely the geniuses in the CB have solutions on their fingertips, they've been dealing with the Irish bust for long enough.  We know they were incompetent during the boom.


----------



## Sunny

Bronte said:


> Are you sure about this, don't they have to put down the true value of assets, in order to determine if they are liquid or not.  I don't see how morgages are assets.  If I own my house but it is mortgaged 100% I don't really have an asset.  And doesn't the central bank decide how much a bank is worth based on actual assets less liabilities.



A mortgage is an asset to the bank just like any other loan. Just like deposits are liabilities. The book value of the asset on the balance sheet is the mortgage less any provisions or writedowns. If my house was worth €1m and I had an outstanding mortgage of €100k, you wouldn't expect the bank to claim they had a €1m asset on their books. Same principle applies to negative equity. 

The case with newbridge and their office is that they weren't writing down the value of their OWN premises.


----------



## Sunny

Bronte said:


> Isn't the 15 million their only 'physical' asset. Why did all the reports hone in on this aspect. Just because it's now worth about 3 million, that's twopence in relation to the real issues. So far all I'm seeing is smoke and mirrors. I'd like to know what the central bank and the judge based the decision on. Which I would have hoped was cold hard figures.  And I don't understand if a solution had to be found, why it took years to do so.  Surely the geniuses in the CB have solutions on their fingertips, they've been dealing with the Irish bust for long enough.  We know they were incompetent during the boom.



Because it meant they were overstating their assets and therefore their solvency. The building didn't cause the crisis. It just meant the credit union were no where near as strong they were claiming. I agree about the CB. This has been going on for years.


----------



## Brendan Burgess

To be fair to the Central Bank, they will get abuse whatever they do in a situation like this. 

At what stage does the Central Bank intervene?  Intervene early and they  cause a run on the bank. Intervene late and they are accused of doing  nothing. 

Back in 2010, the Board of Newbridge were still talking about declaring dividends.  I don't know if they did or not. 


The CB didn't agree with the provisions in the 2010 accounts. They appointed their own independent people to look at them, and their loss estimates were much higher. 

The Directors of Newbridge are still saying that there was no need for the CB to intervene. 

It is understandable that the CB had no confidence in the directors to resolve the problem.  

They thought that the Special Manager might be able to resolve it and keep the CU independent. 

When they realised that this was not going to work, they  tried to get Naas to solve the problem for them. When Naas pulled out, there was a mini-run on the deposits and so the CB had to get stuck in. 

It's a pity that there is not some mechanism other than appointing a very expensive manager to run the CU.  If they could appoint a voluntary board to replace the existing board. But that would be a thankless task for the new board. 

The other big issue for Newbridge was that they were not part of the ILCU which has a fund to help CUs facing liquidity issues.  There was no backstop for Newbridge as it was in CUDA. 

Brendan


----------



## Sunny

The problem is that the CB seems to always come out afterwards and say we had concerns. They did the same with RSA this week. The only time I have seen them act aggressively and  promptly because of concerns was against Quinn Insurance. No wonder he thinks there was a vendetta against him.


----------



## dereko1969

There is no way that any Credit Union should ever be loaning multi-million euro loans, that is not their purpose. 

It seems that there were numerous loans of this type and that the €3.2m loan was not an outlier.

The Board is just deflecting with all this rubbish, they made numerous poor decisions relating to huge loans that must have been authorised outside of their normal lending criteria.


----------



## Gerry Canning

Questions;Comments

1. Newbridge was a stand alone entity , so why not liquidate?
(savers were covered up to k100 in any event)
2. Once other Customers in other Credit Unions knew their deposits were safe , there would be no run on deposits.
3. @ worst , one Union fails.
(nearly all Banks have failed)
4. Even if 20 more fail there are still 380.
5. Newbridge fails so we give it to a failed Bank ?
6. Leave each Credit Union alone , like any franchise some will fail .
eg if one Spar shop fails , Spar keeps going.
7. Our proven incompetent Central Bank is taking control ?
oh dear me !  
Sunny, the Regulators had previously penalised Quinns , so they did not act agressively when they moved on Quinns, had Regulators kept an eye on Quinns as they probably should have , Quinns might still be going.
I do accept that after Quinn it appears Central Bank have reverted to type in not picking up RSA.

Enlightenment would be appreciated !


----------



## RainyDay

Gerry Canning said:


> I do accept that after Quinn it appears Central Bank have reverted to type in not picking up RSA.
> 
> Enlightenment would be appreciated !


Enlighten away; http://www.bloomberg.com/news/2013-...ays-expressed-concern-over-rsa-in-august.html


----------



## Brendan Burgess

> 1. Newbridge was a stand alone entity , so why not liquidate?



In effect, that is what is happening. Their loans and deposits have been transferred to ptsb. 

When that has been done, the CU will be put into liquidation and no depositor will have lost any money. 

It's likely that ptsb will recover far more from the loans, than a very expensive liquidator would. 

Brendan


----------



## ontour

It is not  really a liquidation as the entire operation is being transferred from my understanding of it.

Commitments to employees are transferring.  Is it a TUPE process?  Will PTSB be responsible for redundancy when they realise that they do not need 40-50 staff in Newbridge?  I am guessing that all the other creditors and suppliers are being paid. Have PTSB taken over maintenance contracts for IT systems etc?  Is there anybody taking a financial hit from the liquidation? (apart from obviously every taxpayer :-()


----------



## Sunny

Brendan Burgess said:


> To be fair to the Central Bank, they will get abuse whatever they do in a situation like this.
> 
> At what stage does the Central Bank intervene?  Intervene early and they  cause a run on the bank. Intervene late and they are accused of doing  nothing.
> 
> Back in 2010, the Board of Newbridge were still talking about declaring dividends.  I don't know if they did or not.
> 
> 
> The CB didn't agree with the provisions in the 2010 accounts. They appointed their own independent people to look at them, and their loss estimates were much higher.
> 
> The Directors of Newbridge are still saying that there was no need for the CB to intervene.
> 
> It is understandable that the CB had no confidence in the directors to resolve the problem.
> 
> They thought that the Special Manager might be able to resolve it and keep the CU independent.
> 
> When they realised that this was not going to work, they  tried to get Naas to solve the problem for them. When Naas pulled out, there was a mini-run on the deposits and so the CB had to get stuck in.
> 
> It's a pity that there is not some mechanism other than appointing a very expensive manager to run the CU.  If they could appoint a voluntary board to replace the existing board. But that would be a thankless task for the new board.
> 
> The other big issue for Newbridge was that they were not part of the ILCU which has a fund to help CUs facing liquidity issues.  There was no backstop for Newbridge as it was in CUDA.
> 
> Brendan



Say no more Brendan. Understood!!!


http://www.independent.ie/irish-news/wanted-firm-to-eavesdrop-for-the-central-bank-29756404.html


----------

