What other business gets a state guarentee?
I can understand why the govt. would want to protect depositors, but why would they feel the need to protect an individual bank?
If a bank, Anglo Irish for the sake of argument, went bust then the liquidator would look to call in its loans to developers, the developers would be unable to pay, they in turn would declare bankruptcy and the whole house of cards that is the Irish economy follows soon after.
That's what staggers me: taxpayers seem quite happy to prop up the very people who caused the problem in the first place.
So what if over-extended developers go bust, and drag a couple of banks down with them?
That's what staggers me: taxpayers seem quite happy to prop up the very people who caused the problem in the first place.
So what if over-extended developers go bust, and drag a couple of banks down with them?
An article in last Sunday's Mail on Sunday showed all the TDs that had shares in Irish banks. Quite interesting reading.
Including occupational schemes, private policies (RACs, PRSAs, buy out bonds) and the NTMA managed Pensions Reserve Fund for state pensions. And don't forget the many people with non pension based direct or indirect (e.g. unit linked funds etc.) shareholdings in banks too.To be fair, I would be surprised if there were many people in this country who weren't shareholders in Irish Banks either directly or through their pensions.
Much and all as most people would like to punish the banks, there is no point in cutting off our nose to spite our face.
I think most people fail to appreciate how serious this crisis is.
If the banks and developers were to fail, we might well gloat because of their past greedy antics, but we would be gloating from a sinking ship.
Our economy is already in serious trouble. We need to do everything we can to prevent our economy going bust.
And this government move will more than likely end up costing us nothing anyway.
Something had to be done, and I am sure politicians didn't delight in 'bailing out the banks' - but they knew they had little choice. I for one am glad they had the guts to stand up and do something. It increased my (very little) faith in politicians.
room305
From reading your post it looks like you believe only banks and developers would suffer if a bank or part of our banking system collapsed.
What about the other not construction related business with money on deposit or invested in the banking system are you saying they should loose all their money as well? What about all the jobs? If one of the banks collapsed you could easily be talking 10s of thousands of job losses.
The government stepped in because contrary to what you seem to be saying the banking system is the life blood of nearly all business activity not just the bloody builders.
I think the people who were in charge of the banks and the regulators need to be reprimanded, but right now the number one priority is saving our economy.
I think the people who were in charge of the banks and the regulators need to be reprimanded, but right now the number one priority is saving our economy.
The argument put forward by Alan Dukes on RTE Questions and Answers was because pension funds are invested in the banks and if the banks go belly up then pensions will suffer but this is nonsense because stocks and shares around the whole world are suffering and pensuion funds are supposed to diversify across a range of asset classes and sectors. No pension fund should have more than a tiny % invested in banks after the last 2 years of stock market turmoil.
"You've been a very naughty boy!"
I can see that working, OK........