# Who benefits most from the banks being not allowed to go bust



## LouisCribben (7 Apr 2010)

I'm reading a lot of David McWilliams articles recently.
He is of the view that it was wrong for the state to save the banks especially Anglo, because of the massive cost to the state from buying assets for potentially less than they are worth.

Naturally the taxpayer is the main potential loser from the bail out of the banks.

Who are the winners ?

I guess it's the creditors of the banks (excluding bank deposit holders who are guaranteed payback by the state) who are the winners. 

Who are these creditors ? Where for instance did anglo get the money to lend to the property developers ?

To the creditors in question, Brian Lenihan must be a god like figure.


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## Slim (7 Apr 2010)

I am also trying to understand the intricacies of what has happened. IMHO, the losers are 1. The shareholders who were wiped out 2. the taxpayer who is now carrying the can [many of the former are also in the latter group] 3. Innocent staff of these banks who have/will lose their jobs

Winners: 1.'Bondholders' who have been guaranteed by the state. 2. Depositors who are also guaranteed by the state scheme. 3. Senior staff who have clung to their posts

The problem is that once the Guarantees were given, it could not be taken back. it must be borne in mind that, at the time of the 100%Guarantee, the Deposit Guarantee Scheme only protected approx €22,000 per depositor. A lot of innocent depositors would have lost a lot of money in the blood letting that would have followed.


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## Brendan Burgess (7 Apr 2010)

Let's be absolutely clear. The bail out of the banks benefitted the depositors more than anyone else. People talk about bailing out "the banks" and bailing out the"property developers" and various "golden circles". 




> To the creditors in question, Brian Lenihan must be a god like figure.


The ordinary depositors in the banks should be genuflecting in front of Brian Lenihan.

If the guarantee had not been given, then the ordinary folk would have lost their deposits. 

while there was a fund in place to guarantee €20,000 per individual, that would not have been sufficient for all the claims. 

So we should really change the wording to "Why did the taxpayer bail out the depositors". 

Others have benefitted as well. 

Senior bondholders who have the same rights as depositors. 

(Anglo)Staff who are on an average salary of €105,000 ( I think?) and who have got very generous redundancy payments compliments of the taxpayer. 

The subordinated bonds(in Anglo) have lost a good part of their value because they were not guaranteed. Nor have they been receiving their dividend payments. 

While the taxpayers have lost, it could be argued that we have benefitted from avoiding the collapse of the banking system and the economic ruin which would have ensued.


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